NEW DELHI: Gold prices were trading higher on Friday, on course for second consecutive weekly gain. Investors turned to safe-haven assets while awaiting signals on interest rate hikes from the US Federal Reserve’s meeting next week.
All eyes are set on the US central bank’s Federal Open Market Committee meet scheduled on January 25-26 for any updates on the Fed’s existing plans for rate hikes against the backdrop of surging inflation.
Gold futures on MCX were up by 0.20 per cent or Rs 98 at Rs 48,478 per 10 grams. Silver futures declined by 0.32 per cent or Rs 210 at Rs 65,169 per kg.
Ravindra Rao, CMT, EPAT, VP- Head Commodity Research at Kotak Securities said, “Gold paused as dollar index bounced back after a brief correction gaining support from expectations that Fed may tighten monetary policy at a faster pace. However, supporting price is retreat in bond yields from recent highs, inflationary concerns, geopolitical tensions and virus concerns.”
Gold is considered an inflationary hedge, but the metal is highly sensitive to rising US interest rates, which increase the opportunity cost of holding non-interest bearing bullion.
Physical gold buying faltered in India last week, as prices climbed and rising coronavirus cases prompted consumers to postpone purchases, while demand in top consumer China stabilised ahead of new year festivities.
In the spot market, the highest purity gold was sold at Rs 48,705 per 10 grams while silver was priced at Rs 64,476 per kg on Thursday, according to the Indian Bullion and Jewellers Association.
The spot prices of gold have gained over Rs 1,330 in the last couples of weeks, whereas Silver has jumped more than Rs 4,500 per kg during the period under review.
Trading strategy
Ravi Singh, Vice President and Head of Research, ShareIndia, said existing buyers may book some positions at current juncture with a modified stop loss. He advised to buy gold near Rs 48,100 for the target of Rs 48,500 and sell below Rs 47,900 for the target of Rs 47,700.
Global markets
Spot gold was unchanged at $1,838.21 per ounce as of 0035 GMT. US gold futures were down 0.2 per cent at $1,838.70.
Spot silver was down 0.4 per cent at $24.34 an ounce, but is still set for its best week in a year – up about 6 per cent so far. Palladium fell 0.6 per cent to $2,047.05, and is poised for a weekly gain of about 9 per cent.
Spot platinum dropped 0.4 per cent to $1,034.98, but remains on course for its best weekly showing in seven months, having gained about 6.6 per cent so far.