Gold Rises ₹264 To ₹1.58 Lakh/10g On Weak US Dollar

Gold price climbed by ₹264 to ₹1.58 lakh per 10 grams in futures trade on Thursday, tracking firm global cues as a sharp fall in US dollar boosted the demand for bullion.

On the Multi Commodity Exchange, the yellow metal futures for October delivery increased by ₹264, or 0.17%, to ₹1,58,260 per 10 grams in a business turnover of 10,450 lots.

Analysts said easing US Treasury yields and a weaker dollar supported gold prices, while persistent inflation concerns, elevated crude oil prices and geopolitical tensions continued to cap the upside in bullion.

In the international markets, Comex gold futures for the December contract traded flat at  $4,546 per ounce in New York.

"Gold is hovering above  $4,500 for the first time since early June as a sharp decline in US Treasury yields and the dollar boosted bullion," said Manav Modi, Commodities Analyst at Motilal Oswal Financial Services Ltd.

The US Treasury announced it would double its buyback operations for longer-dated bonds to  $4 billion from  $2 billion per operation starting September 9, providing liquidity support to the long-end of the market.

Modi said the move sent the 30-year US Treasury yield down from near two-decade highs to around 5.19%.

The move weakened the dollar and eased one of gold's key headwinds, while also highlighting concerns over elevated long-term borrowing costs and rising government debt, he added.

Meanwhile, minutes from the Federal Reserve's July meeting showed policymakers remained concerned about persistent inflation. Several officials indicated that further rate hikes could become necessary if price pressures fail to moderate. The minutes also highlighted inflation risks stemming from the West Asia conflict and prolonged supply disruptions.

"With long-term yields easing sharply, the dollar weakening and fiscal concerns supporting demand for alternative stores of value, gold's safe-haven demand continues to surge," Modi said.

Investors will focus on US weekly jobless claims and the Philadelphia Fed manufacturing index later in the day, he added.