Gold. Picture: REUTERS
Gold. Picture: REUTERS

Bengaluru — Gold rose on Thursday for a second consecutive session as the dollar remained weak, making the metal cheaper for buyers in other currencies, also supported by good physical demand in Asia.

Spot gold was up 0.3% at $1,199.36 at 2.29am GMT, after rising 0.5% in the previous session.

US gold futures rose 0.3% at $1,205/oz.

"A bit of weakness in the US dollar has stabilised some of the selling [in gold] we saw earlier in the week," ANZ analyst Daniel Hynes said.

"That was also supported by relatively positive signs of physical demand, in particular in India. That seems to have also boosted sentiment a little," Hynes said. A further weakness in the greenback should help gold sustain the momentum, he said.

Gold has tumbled more than 12% from a peak of $1,365.23 in April. Present levels have invoked a lot of physical buying in not just active gold buying countries like India and China, but in Southeast Asia for investment purposes too, traders and analysts said.

India’s gold imports more than doubled in August to hit their highest level in 15 months as lower prices prompted manufacturers to replenish inventory.

"Physical demand has been a bit higher in India as this is a peak season for buying gold due to weddings and festivals," said Hareesh V, head of commodity research, Geojit Financial Services.

"But the weaker rupee is pushing prices up. Historically, we have seen gold demand increasing with the prices during the season. We should see that this time too."

Gold has been under pressure for most of 2018 on rising interest rates, global trade tensions and an emergency-market currency crisis, with investors parking their money in the dollar, undermining the metal’s safe-haven status.

The dollar index against a basket of six major currencies stood at 95, down 0.2% after shedding nearly 0.3% overnight.

Meanwhile, trade concerns continued to keep investors nervous, with a deadline looming in the US-China trade dispute.

Technical indicators paint a neutral picture for gold, with the metal expected to be in a range of $1,160-$1,238 over the next four weeks, said Reuters technical analyst Wang Tao.

Among other precious metals, spot silver was mostly flat at $14.16. The metal hit a more than two-and-a-half-year low at $13.97 early this week.

Platinum was up 0.4% at $785.90, while palladium rose 0.3% to $975.

Reuters

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