Spot gold prices touched a high of $1157/oz on friday.

MARKET RECAP

Gold prices came under pressure in the last week as the dollar strengthened in the earlier trading sessions. But the yellow metal prices wiped out major losses towards the end of the week as the dollar declined, paving way for gold prices to conquer the lost territory.

OUTLOOK

We expect the US dollar to weaken today as risk appetite in the financial markets will lead to less demand for the low-yielding currency. This will help the gold prices to gain as the yellow metal usually trades inversely to the greenback.

Gold prices could also rise in the coming days on expectation that signs of inflation will revive demand for the metal as a store of value. India the world’s largest buyer of gold jewelry faces inflation of almost 15% and consumer prices in the UK too climbed 3.4% in March. Accommodative policy by the US government is also raising risk of inflation and the yellow metal is attracting demand as a safe-haven.