Gold surges 1% as US Dollar weakens after ECB supports a stronger euro

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Gold surges 1% as US Dollar weakens after ECB supports a stronger euro

On Thursday, the precious safe-haven yellow metal futures rose as much as 1 per cent as the American Dollar appears to be shredding off its safe-haven appeal after ECB policymakers’ move to keep interest rate unchanged had lifted euro to a one-week high against its American counterpart.

In point of fact, the day’s rally of the gold futures’ prices was almost entirely goaded by a set of slandering US economic data pouring fresh scorns over the American Dollar, as US weekly jobless claims stood at a higher-level last week, while a slowdown in PPI (Purchasing Price Index) gains in August suggesting a lower inflation fundamental in a longer term outlook had narrowed down the leeway for an ailing US labour market, eventually diminishing hopes of a quicker-than-anticipated rebound of the economy.

Gold gains after upbeat ECB meet lifts euro to a one-week high against US Dollar

Apart from a basket of downbeat economic data released on Thursday, ECB’s (European Central Bank) Lagarde’s upbeat remarks over a stronger euro had eclipsed American Dollar’s outlook, though some policymakers had raised questions over a stronger euro in light of an export-oriented economy of the eurozone.

Citing statistics, on the day’s commodity market closure, the spot gold futures’ prices gained as much as 0.5 per cent to wrap up the day at $1,956.06 an ounce after hitting an intra-session high of $1,965,9, while US gold futures added 0.5 per cent to settle down the day at $1,964.30.

In tandem, as the US Dollar Index (DXY) measured against a basket of six major currencies had shrugged off 0.30 per cent to close the day at 93.24, among other precious metals, platinum gained 1.6 per cent to $930.80 an ounce, while palladium futures surged 1.7 per cent to $2,309.93.

Meanwhile, referring to a strident stance of European Central Bank over a stronger euro, a head of commodity strategists at TD Securities, Bart Melek said on the day’s commodity market closure, “The ECB didn’t really change its policy and so we’re seeing the U.S. dollar dropping here. That’s positive for gold.