Bengaluru — Gold steadied on Wednesday, supported by a dip in the dollar, while gains were capped by a rally in global stocks following reassuring economic data from the US and China and optimism that the two countries would strike a trade deal.
Rising stock markets are holding gold back, said Fawad Razaqzada, market analyst with Forex.com, adding, “investors are moving into racier equity markets rather than slower moving precious markets. Given the fundamental factors, even though the equity markets remain supported, it doesn’t mean gold will fall. With the US Federal Reserve being dovish, the dollar being low, and yields being lower, the fundamental environment for gold itself is positive.
The dollar index, which was sought over gold last year against a backdrop of an unfolding trade war, was down 0.4%, making bullion cheaper for holders of other currencies. Investors are now waiting for clues on the strength of the US economy from non-farm payrolls data due on Friday.
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