Gold price firms up on dip in the US dollar

2 min read | November 02, 2021 01:29 PM AEDT | By Arpit Verma

Gold price firms up on dip in the US dollar — Image source: © Theohudayanto | Megapixl.com

Stronger earnings in equities dimming gold’s appeal

The stronger earnings in equities took off the appeal of gold. The strong performance of US equities has dampened the demand for safe haven, however, the prices inched up on Monday.

The prices of gold were additionally buoyed due to an ease in the US dollar that makes bullion less expensive for other currency holders.

Gold prices have rallied earlier on the back of concerns related to inflation and uncertainty of the central bank's measures to combat rising prices.

The US Federal Reserve is expected to start bond purchase, a sign that it sees the US economy is recovering.

Falling gold prices

Falling gold prices | Source: © Auris | Megapixl.com

Reduced interest rates hikes and stimulus tend to push government bond yields up, raising the opportunity cost of holding gold.

The retail gold market is gaining momentum in countries like India and China due to the festive season and marriage seasons, the demand could boost gold prices further.

Bottom Line

Gold prices firmed on Monday due to ease in the strength of the US dollar and equities paring gains. The prices rallied earlier on the back of concerns related to inflation and uncertainty of the central bank's measures to combat rising prices.

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