Home >Markets >Commodities >Gold prices hit 2-month high as US yields slip, weak dollar

After a prolonged dull period, gold prices have started to escalate in April amid concerns of inflationary pressures as global pandemic continues to hamper business growth. International gold prices hit two-month high on Friday at $1771.37 per ounce on Friday afternoon.

According to Navneet Damani, VP-Commodities Research, Motilal Oswal Financial Services, “Gold traded higher to a more than one-month peak as US Treasury yields slipped despite better than expected US economic data, pushing investors to bullion as a refuge against possible inflation ahead.

“Concerns regarding inflation is increasing ahead of massive fiscal aids and ultra-low interest rates across the globe supporting the metal. Gold prices also got a boost after the U.S. government imposed a broad array of sanctions on Russia as punishment for alleged misdeeds, including interfering in the 2020 US election," he said.

Damani feels international gold prices could be between $1745- 1778 per ounce and on the domestic front prices could hover in the range of 46,850- 47,450 per 10 gram.

After a massive rally of 28% in 2020 as investors rushed to buy the yellow metal considered as safe haven, gold prices slumped in first three months of this, falling 6% in February. However, gold prices have gained nearly 4% in April so far as investors remained cautious about other asset classes.

Jigar Trivedi, Research Analyst- Commodities Fundamental, Anand Rathi Shares & Stock Brokers said, “The recious metal benefited from some safe-haven demand stemming from the news that the US FDA recommended states pausing the use of Johnson & Johnson's coronavirus vaccine after six cases of blood clots. The yellow metal looked set to post a second straight weekly gain on inflationary concerns. We expect gold to continue with upward momentum."

The United States on Thursday imposed a broad array of sanctions on Russia, including curbs to its sovereign debt market, to punish it for interfering in last year’s US election, cyber hacking, bullying Ukraine and other alleged malign actions.

The US government blacklisted Russian companies, expelled Russian diplomats and barred US banks from buying sovereign bonds from Russia's central bank, national wealth fund and Finance Ministry. The United States warned Russia that more penalties were possible but said it did not want to escalate.

(Reuters contributed to the story)

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