New Delhi: Gold prices were trading flat on Wednesday despite a strong trend seen in the international market. A pullback in the dollar and Sino-US tensions helped counter the pressure from a rise in US Treasury yields.
However, hawkish comments from the Federal Reserve officials on interest rate hikes weighed on the sentiments. A trio of Fed policymakers signalled on Tuesday that there would be no let-up in the tightening campaign.
Gold futures on
were trading flat, marginally lower, by 0.01 per cent or Rs 6 at Rs 51,376 per 10 grams. However, silver futures dropped 0.36 per cent or Rs 206 at Rs 57,380 per kg.
Although gold is considered a hedge against inflation, rising US interest rates reduce the appeal of non-yielding bullion.
According to Ravi Singh, Vice President and Head of Research, ShareIndia, gold prices have been steady amid weakness in dollar and bond yields since the Fed’s latest rate hike and its pledge of further hikes to curb inflation.
“The recent development of the US House Speaker Nancy Pelosi’s visit to Taiwan may escalate the tension between US and China, supporting the gold safe-haven appeal. Gold may remain volatile this week ahead of the OPEC meeting,” he added.
In the spot market, the highest purity gold was sold at Rs 51,549 per 10 grams while silver was priced at Rs 57,904 per kg on Tuesday, according to the Indian Bullion and Jewellers Association.
The spot prices of gold have increased by Rs 1,600 per 10 grams in the last eight trading sessions, whereas silver closed to Rs 4,000 per kg in the same period under review.
Trading Strategy
“We expect gold prices to trade sidewys to up for the day with COMEX Spot gold support at $1,750 and resistance at $1,785 per ounce. MCX Gold October support lies at Rs 51,100 and resistance at Rs 51,700 per 10 grams,” said Tapan Patel, Senior Analyst (Commodities),
Securities.
Global markets
Spot gold was up 0.4 per cent at $1,766.59 per ounce, as of 03:09 GMT. On Tuesday, bullion rose to a near one-month high of $1,787.79 before closing down 0.6 per cent on the day. US gold futures slipped 0.5 per cent to $1,780.80 per ounce.
Spot silver fell 0.2 per cent to $19.91 per ounce, platinum gained 0.2 per cent at $895.52, and palladium rose 1.2 per cent to $2,087.66.
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