NEW DELHI: Gold prices were trading lower on Thursday, slipping on the back of a firm US dollar after better-than-expected US retail sales data clouded hopes of a smaller rate hike.
On the other hand, Poland’s president on Wednesday said a missile that hit his country was probably a stray Ukrainian defence projectile, dispelling fears that it came from Russia and could widen the Ukraine crisis.
Gold futures on
were trading lower by 0.34% or Rs 183 at Rs 52,879 per 10 grams. Similarly, silver futures tanked 0.73% or Rs 454 to Rs 61,543 per kg.
Gold is seen as a hedge against inflation, which rising rates aim to tackle, thereby diminishing the metal’s appeal. Higher interest rates also make other assets more attractive compared with non-interest-bearing bullion.
NS Ramaswamy, Head of Commodities,
Securities said gold prices were flat in Asian hours as safe-haven demand from the latest geopolitical concerns faded.
“Data showed US retail sales increased more than expected in October, boosted by purchases of motor vehicles and a range of other goods, suggesting that consumer spending could help to underpin the economy in the fourth quarter,” he added.
A spike in domestic prices put off gold consumers in India last week and prompted dealers to offer discounts, with higher rates playing spoilsport in China as well.
In the spot market, the highest purity gold was sold at Rs 53,094 per 10 grams while silver was priced at Rs 62,594 per kg on Wednesday, according to the Indian Bullion and Jewellers Association.
The spot prices of gold have jumped more than Rs 3,000 per 10 grams in less than two weeks, whereas spot prices of silver have jumped more than Rs 5,500 per kg during the same period under review.
Pritam Patnaik, Head – Commodities, Axis Securities said, “We have witnessed some profit taking at these levels. Once these levels are taken out, the prices could easily rally towards $1800 and beyond.
The stage looks well set for a potential rally in the medium to long run, as plateauing inflation, weaker US dollar and stalling bond yield could act as catalysts for the next bull run in gold prices, he added. “We maintain a buy on dips strategy.”
Trading Strategy
“Bullion charts are given upper side breakout and showing strength now. Momentum indicator RSI is also indicating the same,” said Amit Khare, AVP- Research Commodities, Ganganagar Commodity.
He suggested traders to make a fresh buy position in gold and silver near given support levels at Rs 52,800-52,600 and Rs 61,500-61,000, respectively. He also advised profit booking near resistance levels at Rs 53,200-53,500 and Rs 62,500 and Rs 63,000, respectively.
Global markets
Spot gold was down 0.4% at $1,766.79 per ounce, as of 0252 GMT. US gold futures fell 0.3% to $1,769.90.
Spot silver dipped 0.5% to $21.36 per ounce. Platinum fell 0.5% to $1,001.20 and palladium was down 0.7% at $2,057.18.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)