Gold prices on Wednesday retreated from a more than five-week high with the dollar inching higher amid a basket of reserve currencies. On Wednesday, spot Gold touched a peak of $1,235 per ounce, retreating from a high of $1,235.31 per ounce recorded on Oct 26.
The dollar index, which measures the greenback against a basket of six major currencies, edged up about 0.1 per cent, even though the U.S. currency was under pressure as declining Treasury yields raised concerns over economic growth.
U.S. President Donald Trump on Tuesday held out the possibility of an extension of the 90-day trade truce with China, but warned he would revert to tariffs if the two sides could not resolve their differences. Meanwhile, the U.S. Federal Reserve Chairman Jerome Powell had commented during last Wednesday that U.S. interest rates were nearing neutral levels. Markets interpreted this as a signal of a slowdown in rate hikes.
Also, Benchmark 10-year Treasury yields dropped to a lowest point since mid-September, and shrinking yields have lead investors to question an economic slowdown.
Traders believe these are contrasting signs.
A Reuters report quoted two traders saying that there was better outlook for the yellow metal. Gold, one of the analyst concurred, could test levels of $1,242.5 per ounce while a downside could be $1,230.
Palladium, the other precious metal too followed the Gold in making a retreat. Palladium retreated by 0.5% to $1,226.49 per ounce.
In the national Capital, Gold prices gained by a margin of Rupees 100 per ten grams on Wednesday.
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