The price of gold was on the positive territory on Monday’s opening bell as it was reinforced by the U.S. dollar’s recent dip against its major opposing currencies and the poor performance from the stock market. Political uncertainties in the U.S. also influenced prices.
The U.S. dollar touched its lowest level since June 2016 against its major peers on the same day driven by the doubts on the abilities of President Donald Trump on enacting tax reform and stimulus agendas in the middle of political woes. Meanwhile the euro being close to its two-year high on the European Central Bank’s being unconcerned on its strength also contributed to the weakness of dollar.
The sluggishness of the greenback is good for gold because it will make the non-yielding bullion low-priced for holders outside the United States, which will further increase the demand.
Looking on prices, U.S. gold futures added more than 0.1 percent to settle at $1,256.00 an ounce for its August delivery. Spot gold was also higher by 0.1 percent and trades at $1,255.92 an ounce after hitting a four week high of $1,257.18 an ounce earlier. Spot rose as much as 2.1 percent on the previous week.
Equities in Asia didn’t perform well on the day as risk asset demand retreated on the back of strong gains. The demand of gold in the region has been gradually decreasing last week driven by heightened prices along with a seasonal slowdown reduces the demand of the yellow metal in India, which is the largest gold consumer in the world.