Gold prices extend rally for fifth day as dollar slips; all eyes on US economic data

Gold Price Today, July 23: Gold prices edged higher on Thursday and were on track to record their fifth consecutive session of gains, supported by weakness in the US dollar, which made bullion more attractive for foreign buyers.

As of 6:45 am, spot gold was trading 0.1 per cent higher at USD 4,135.32 per ounce. Prices were on track to rise for the fifth straight session, reaching their highest level since July 7. Spot silver also moved higher, gaining 0.3 per cent to trade around USD 60 per ounce.

While gold and silver futures were not trading at the time of writing, gold futures on the Multi Commodity Exchange (MCX) settled more than 2 per cent higher at Rs 1,45,693 per 10 grams, while silver futures settled at Rs 2,27,180 per kg.

Dollar Weakness Supports Gold Prices

The US dollar index, which measures the greenback against a basket of six major currencies, was trading lower at 101.07. A weaker dollar generally supports gold prices as it reduces the cost of the metal for investors holding other currencies and increases its appeal as an alternative store of value.

Oil Price Impact on Gold Rates

On the geopolitical front, US Secretary of State Marco Rubio said Washington was open to negotiations to resolve the Iran crisis, but added that Tehran was not serious about talks.

Meanwhile, gains in bullion were limited by a sharp rise in oil prices. Brent crude was trading above the USD 96-per-barrel mark, gaining more than 2 per cent, while WTI crude stood at USD 88.28 per barrel.

Higher oil prices can fuel inflationary pressures and may increase expectations of tighter monetary policy, which can weigh on non-yielding assets such as gold.

Interest Rate Outlook Remains Key

Market participants are closely tracking expectations around Federal Reserve policy. According to the CME FedWatch Tool, markets were pricing in more than a 75 per cent probability of a rate hike at the September FOMC meeting. Analysts are also expecting at least one rate hike from the Federal Reserve in 2026.

However, a Reuters poll indicated that the Fed is likely to keep its benchmark interest rate unchanged through the rest of 2026, with markets pricing in two rate hikes by the end of March next year.

Typically, higher interest rates pressure gold prices as rising bond yields make interest-bearing assets more attractive compared with non-yielding bullion.

Focus Shifts to US Labour Data

Investors will closely watch the Initial Jobless Claims data due on Thursday for further clues on the direction of bullion prices.

Jobless claims are an important indicator for gold markets as they provide an early signal of labour market conditions. A rise in claims may indicate economic weakness, potentially increasing expectations of future rate cuts and supporting gold prices.

(Disclaimer: The above article is meant for informational purposes only and should not be considered as any investment advice. ET NOW DIGITAL suggests its readers/audience to consult their financial advisors before making any money-related decisions.)