Central to the debate at the Fed's July 26-27 policy meeting will be how to reconcile upbeat US economic data, highlighted by strong job gains in June, with a global growth slowdown and other headwinds threatening the inflation trajectory.
global sell-off, falling oil prices, and news about possible cut in production by OPEC. JP Morgan‘s economist James Glassman is also surprised at the sell off seen in global markets because according him there is nothing in the US economic data that one needs to worry about.
Spot gold was little changed at USD 1,089.20 an ounce by 0035 GMT, after a lethargic session on Monday with US markets shut for the Martin Luther King holiday.
US retail sales fell in December along with industrial production, the latest indication that economic growth braked sharply in the fourth quarter. Oil prices slid to the lowest since 2003.
Silver too recovered and reclaimed the Rs 34,000-mark by rising Rs 220 to Rs 34,015 per kg on increased offtake by industrial units and coin makers. A weaker rupee, which plunged to hit fresh 28-month low of 67.59 against the dollar yesterday that made imports costlier also supported the upside in gold prices.
At the Multi Commodity Exchange, gold for delivery in February was trading higher by Rs 85, or 0.33 percent, at Rs 25,722 per 10 gram, in a business turnover of 782 lots.
Spot gold slid 0.1 percent to USD 1,076.88 an ounce by 0007 GMT while US gold futures gained 0.3 percent to USD 1,076.8.
US stocks sold off sharply and a brief rally in beaten-down oil prices stalled after US data added to concerns about an over supplied energy market.
Spot gold firmed 0.2 percent to USD 1,095.6 an ounce by 0037 GMT, while US gold futures GCcv1 eased 0.1 percent to USD 1,095.2.
Asian share markets swept lower after Wall Street suffered its worst starting week in history and doubts over Beijing's economic competence sent investors into the arms of the safe-haven yen and sovereign bonds.
Silver followed suit and recovered to close higher on increased offtake by industrial units and coin makers. In the global market, the precious metal once again topped the USD 1,100 an ounce mark.
Traders said besides a firm global trend where gold rallied to a two-month high in yesterday's trade, increased buying by jewellers at the domestic spot markets to meet rising demand, mainly lifted the precious metal to over two-month highs.
Spot gold prices rose for a fifth successive day on Thursday, with bullion up about 4 percent since the start of the year. Prices topped $1,100 an ounce for the first time in nine weeks as the dollar fell after concerns over the Chinese economy hit global stocks.
China's stock markets were suspended less than half an hour after opening on Thursday after sharp falls triggered a new circuit-breaking mechanism for a second time since its introduction this week.
Spot gold had eased 0.1 percent to USD 1,092.90 an ounce by 0043 GMT. But it wasn't far from USD 1,095.30 reached on Wednesday, its highest since Nov. 16.
At the Multi Commodity Exchange, gold for delivery in February was trading higher by Rs 65, or 0.26 percent, to Rs 25,453 per 10 gram, in a business turnover of 275 lots.
Silver followed suit and edged higher by Rs 75 to Rs 33,700 per kg on increased offtake from industrial units and coin makers.
Spot gold was up 0.3 percent to USD 1,063.50 an ounce by 0043 GMT. US gold futures GCcv1 also rose 0.3 percent. Silver XAG= jumped nearly 1 percent to USD 13.91.
Investors have sold off the metal, down about 10 percent for the year, on fears that higher US interest rates would dent the appeal of non-interest-paying bullion.
The precious metal has lost nearly 10 percent of its value this year, largely on fears that higher US interest rates would hurt demand for non-interest-paying bullion.
Spot gold was little changed at USD 1,070.05 an ounce by 0116 GMT, after losing 0.6 percent in the previous session. Volumes remained thin in the last trading week of the year.
Oil prices fell after the long Christmas weekend, with international crude and product markets still well supplied in excess of demand. Gold is positively correlated to oil as the metal is seen as a hedge against petroleum-led inflation.
In the national capital, gold of 99.9 percent and 99.5 percent purity advanced by Rs 15 each to Rs 25,690 and Rs 25,540 per 10 grams, respectively. It had gained Rs 125 yesterday. Sovereign, however, remained steady at Rs 22,200 per piece of eight grams.
Spot gold rose 0.2 percent to USD 1,072.10 an ounce by 0037 GMT, after losing 0.7 percent in the last two sessions.
Spot gold was little changed at USD 1,073.46 an ounce by 0040 GMT. The metal eased 0.6 percent on Tuesday, snapping a two-day rally.