Gold prices in the futures market on the MCX gained over Rs. 200 or close to 0.5% and traded above Rs. 45500 per 10gm, the yellow-metal's one month high-rate. This is as dollar and the US treasury yield witnessed a pullback which provided support to gold prices. Last week, gold moved to its one-year low price.
Spot gold was up 0.3% at $1,733.31 per ounce, as of 0117 GMT. Gold futures were up 0.4% at $1,735.10 per ounce.
There has been seen a drag in long dated US-treasury yield as investors took a pause on selling government bonds. Also at the same time, dollar went lower to 2-week low against rival currencies.
When there is lower yield, the opportunity cost of holding bullion lessens, which is majorly a non-yielding asset class.
Economic data however weighed negatively on gold
In the US, services data has come in very strong and surged to a record high which reduces the appeal of instruments such as gold.
On Monday, Loretta Mester, Cleveland Federal Reserve Bank said the Federal Reserve should adhere to its easy monetary policy in order to trigger growth further. Moreover, the US President Biden defended his proposal of raising corporate tax for funding his infrastructure plan and said that he wasn't concerned that the hike would dent the economic improvement.
Outlook for gold price
"Intraday upticks for gold are in cards as long as $1680 hold the downside. However, a direct break of $1760 is required to trigger major rallies in the counter. Further weakness is seen only a close below $1660," Geojit said in a note.