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Gold Prices In India Recover Even As International Rates Dip On US Payroll Data

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On Monday, gold prices in India recovered after a sharp fall of Rs 1,000/10 grams seen in the previous session. On MCX, India's commodity exchange, gold futures rose more than 0.5 percent to Rs 45,953 per 10 grams in the morning session even as international prices remained subdued on an unexpected recovery reported in the US employment data on Friday.

Gold Prices In India Rise As Rupee Remains Weak
 

Spot gold was trading lower by 0.2 percent at $1,682.57 per ounce after falling 2.4 percent last week, the third consecutive weekly drop.

The US added 2.5 million jobs in May after suffering record losses in the prior month, data from the Bureau of Labor Statistics showed on Friday. The surprise increase in non-farm jobs against an expectation of decline had improved risk sentiment among investors, causing equity markets to recover. In fact, the tech-heavy Nasdaq index rose to a new all-time high on Friday.

Focus is now on the US Federal Reserve that is set to hold a two-day policy meeting ending on Wednesday.

An improvement in risk sentiment makes gold a less attractive investment as it is traditionally considered a safe haven against uncertainties.

In India, the depreciation in rupee's valuation that stayed above the 75/dollar mark may have increased the gold prices. Despite a strong opening in Indian equity markets in the morning session on Monday, the domestic currency opened 75.57 against the US dollar when compared to Friday's close of 75.58. The rupee generally moves in the direction of the Indian market indices. It was also unaffected by the eighth day of decline in the American currency.

Read more about: gold gold prices
Story first published: Monday, June 8, 2020, 10:49 [IST]
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