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Gold Edges Higher as Dollar Weakens Following Fitch`s US Downgrade

Published on Aug 02, 2023 14:54

Gold edged up in early European trading as the US dollar, treasury yields, and Asian stocks declined following Fitch`s US credit rating downgrade, boosting safe-haven interest. Fitch`s downgrade from AAA to AA+ cited fiscal concerns and political conflicts impacting US fiscal management.

Silver prices outperformed gold last month with a sharp jump of more than 8%. The spike in silver prices was led by increasing industrial demand for the metal amid optimism over more stimulus measures in China. Gains in prices of base metals also improved sentiment for silver.

Yesterday, Gold dropped 1% to a three-week low amid a stronger dollar after a relatively solid data on US manufacturing and construction in June offset a decline in job openings last month. Focus remains on Friday`s non-farm payrolls report, a key barometer of the health of the US economy.

World Gold Council reported a 2% YoY decline in global Q2 gold demand, excluding over-the-counter transactions, due to reduced central bank purchases and weak tech sector consumption. WGC also released that China`s Q2 gold jewelry demand rose 28% YoY to 132t, driven by recovery and dual appeal. Indian gold jewelry demand fell 8% YoY in Q2 due to high prices, with cautious optimism for H2.

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