NEW DELHI: Gold prices bucked global trends and were trading higher in the Indian market. However, the yellow metal was set for another weekly loss, third in a row. In the global markets, firm US dollar and Treasury yields rallied on a hawkish US Federal Reserve stance, with investors awaiting jobs data due later in the day.
Gold futures on MCX jumped mildly 0.11 per cent or Rs 55 up at Rs 50,954 per 10 gram. However, silver futures were trading higher by 0.13 per cent or Rs 84 at Rs 62,420 per kg.
Rahul Kalantri, VP Commodities, Mehta Equities, said gold’s reversal comes amid another rally in the dollar index, which typically hurts appeal for bullion among overseas buyers, as well as the benchmark US 10-year Treasury yields.
“Bond yields will continue rising because of expectations that monetary policy from the Fed and other major central banks will be tightened further. This is going to hold gold back from going too high in the medium term,” he added.
In the spot market, highest purity gold was sold at Rs 51,787 per 10 grams while silver was priced at Rs 63,331 per kg on Wednesday, according to the Indian Bullion and Jewellers Association.
The spot prices of gold have remained below Rs 51,000 mark for three straight sessions, whereas silver continues to settle below Rs 63,000 in the same period.
Gold prices are rising a bid on weaker equities and geopolitical tensions, facing headwinds from the rate hike from Fed, said Ravi Singh, Vice President and Head of Research, ShareIndia.
Trading strategy
“We expect gold prices to trade sideways to down for the day with COMEX Spot gold support at $1,850 and resistance at $1,890 per ounce. MCX Gold June support lies at Rs 50,300 per gram and resistance at Rs 51,200 per 10 gram,” said Tapan Patel, Senior Analyst (Commodities), HDFC Securities.
Global markets
Spot gold fell 0.1 per cent to $1,875.66 per ounce, as of 0307 GMT, while U.S. gold futures were steady at$1,875.40. Bullion has declined about 1 per cent so far this week.
In other metals, spot silver slipped 0.5 per cent to $22.38 per ounce and was on track for a third consecutive weekly decline. Platinum slid 2.7 per cent to $953.90 and palladium fell 0.6 per cent to $2,174.95.