New Delhi: Gold prices ticked up on Wednesday as the dollar weakened slightly, but moved in a relatively narrow range as investors looked to gauge the pace of rate hikes by the US Federal Reserve.
Fed fund futures are expecting a 91% chance of a 50-basis point (bps) rate increase in the December meeting, said Reuters. The Fed meeting is scheduled on December 13-14.
Gold futures on
were trading higher, rising 0.17% or Rs 93 at Rs 53,853 per 10 grams. However, silver futures soared higher by 0.47% or Rs 306 to Rs 65,720 per kg.
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High-interest rates have weighed on gold’s traditional status as a hedge against inflation and other uncertainties this year, as they translate into a higher opportunity cost of holding the non-yielding metal.
Traders wait for further cues ahead of important economic data in the week, said Ravindra Rao, CMT, EPAT, VP-Head Commodity Research, Kotak securities.
“As Fed’s stance is based on the inflation print, traders are cautious ahead of the data as seen in the range bound movement in price,” he added.
Physical gold demand stalled in India last week on higher prices, while premiums fell in top consumer China as Covid-19 restrictions dulled activity.
In the spot market, the highest purity gold was sold at Rs 53,629 per 10 grams while silver was priced at Rs 64,648 per kg on Tuesday, according to the Indian Bullion and Jewellers Association.
The spot prices of gold have jumped about Rs 1,100 per 10 grams in the last two weeks, whereas silver has gained more than Rs 3,100 per kg during the same period under review.
Rahul Kalantri, VP-Commodities, Mehta Equities, said that gold and silver prices were marginally higher as the metals quickly rebounded from Monday’s selling pressure. The bulls have the overall near-term technical advantage.
“Metals markets were battered by a sharp rise in US interest rates this year, as higher yields increased the opportunity cost of holding non-yielding assets,” he said.
Trading Strategy
“Bullion charts are now showing some profit booking and looking overbought. Momentum indicator RSI
is also indicating the same,” said Amit Khare, AVP- Research Commodities, Ganganagar Commodity. He advised traders to make fresh short position.
He suggested selling gold and silver near given resistance levels at Rs 53,900-54,100 and Rs 65,900-66,300, respectively. He also advised profit booking near support levels at Rs 53,500-53,250 and Rs 65,000-64000, respectively.
Global markets
Spot gold was up 0.1% at $1,773.17 per ounce, as of 0247 GMT. US gold futures rose 0.2% to $1,785.50.
Spot silver edged 0.2% higher to $22.21. Platinum was up 0.1% at $990.00 and palladium rose 0.4% to $1,855.15.
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