Gold edges higher on a weak dollar

bengaluru — Gold edged higher on Friday as the dollar eased, but was still trading near the 3-1/2-week low touched in the previous session, with investors flocking to riskier assets amid a surge in US equities.

Spot gold was up 0.1 per cent at $1,275.81 an ounce at 0830 GMT. On Thursday, it fell 0.7 per cent to touch its lowest since November 6 at $1,270.11. The yellow metal is down 0.9 per cent for the week.

US gold futures gained 0.2 per cent to $1,275.30.

“There is a positive mood in the equity market. The US dollar has been strong too (overall). So, it is not beneficial for investors to invest in the commodity market now,” said Dick Poon, general manager at Heraeus Metals Hong Kong Limited.

“People are focusing on stocks in the short-term and are also awaiting an interest rate hike by the US Federal Reserve.”

On Wall Street overnight, major indexes marked gains with the S&P 500 SPX hitting a record closing high and the Dow Jones industrial average topping the 24,000 mark for the first time.

The continued strength in equities and higher yields are putting pressure on gold, MKS PAMP said in a note.

The dollar index , which gauges the greenback against a basket of six major rivals, was down 0.2 per cent as the market endured the wait for a vote on a US tax reform bill.

The Republican tax overhaul stalled on a procedural issue as the Senate debated the legislation late into Thursday and adjourned, putting off any votes until Friday morning. — Reuters