On Tuesday, the precious metal gold glided owing mainly to the increase in a dollar. In addition, the positive US data, which fuelled the speculation on Fed interest rate hike, drove the global share market to a new height. Palladium swelled over 6% on robust vehicle sales in the US.
Spot gold was lower 0.2% at $1,235.96 per ounce following a largest monthly profit over four years. The
US gold futures for April was down 0.3% at $1,230.80. Gold prices earned higher in the early trading on poor manufacturing data from China and on William Dudley's statement that he projects a risk of shortcomings in the US economic data.
The US dollar rallied against other major currencies in the currency market after the manufacturing sector in the US seemed to soothe in February, which backs the prediction of higher interest rate in the US. The global equity market reached its highest helped by US stocks, Reuters said.
India, the second largest consumer of gold, hiked the import duty on gold to $399 per 10 grams and silver to $495 a kg owing mainly to the increase in global gold market. Gold increased 0.4% to $1,228.65 per ounce in Singapore trading market. In December 2015, gold purchases in India increased to $3.8 billion owing mainly to the collapse in global gold prices, according to the THE TIMES OF INDIA.
Spot palladium grew as high as 6.7% to $523 per ounce. Silver XAG fell 0.1% and settled at $14.86 per ounce, but platinum increased 0.6% to settle at $935.74 per ounce.
Holdings in SPDR, the bullion supported exchange fund, increased to the peak on Friday. The fund lured $4.55 billion of fresh capital in 2016, according to Bloomberg data. The ongoing gossip that there will be a long pause before the US Federal Reserve increase its interest rate boosted the metal price in the past.
Meanwhile, Mario Draghi, president of European Central Bank, said that growth and the future of inflation have faded in the Euro Zone. Although investors are motivated to channel cash into gold, the growing prices of gold have halted demand in some Asian countries.
"Some U.S. dollar strength (is putting) a headwind into the gold market here, even though you've got a lot of speculation now moving to be long gold and (monthly) exchange-traded product flows rising to the second-highest level since February 2009", according to the US Bank Wealth Management's chief investment strategist, Rob Haworth.
While countries like India try to halt the demand for this precious metal, gold seems to be the most powerful dictator in the global market. There is a fall in the gold prices whenever the dollar rises. Still, investors tend to invest in gold.
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