NEW DELHI: Gold prices edged higher on Friday but were headed for a straight third weekly drop.
Gold futures on
were trading flat, up 0.08 per cent or Rs 39 at Rs 50,109 per 10 grams. However, silver futures gained 0.21 per cent or Rs 113 to Rs 52,715 per kg.
Patnaik, Head – Commodities, Axis Securities said the trajectory that gold prices have taken in the last week is not surprising. The US Fed voices so far have been unanimously hawkish.
“The market will definitely track the NFP data today, but either way, it may not translate well for gold,” he added. “The recovery rally in gold is still some time off. So, ‘sell on rise’ is the recommended strategy.”
Major central banks are expected to continue with aggressive monetary policy tightening to rein in sky-high inflation but are also fanning fears of an economic slowdown.
Even though gold is seen as a hedge against inflation and economic uncertainties, higher interest rates increase the opportunity cost of holding the bullion.
Further, persistent weakness last month in China’s property market and manufacturing sector has renewed risks to the major gold consumer’s recovery already threatened by disruptions from widespread Covid restrictions.
In the spot market, the highest purity gold was sold at Rs 50,409 per 10 grams while silver was priced at Rs 52,022 per kg on Thursday, according to the Indian Bullion and Jewellers Association.
The spot prices of gold have plunged more than Rs 2,050 per 10 gram in the last three weeks, whereas silver has dropped about Rs 6,700 per kg in the same period under review.
Ravindra Rao, CMT, EPAT, VP- Head Commodity Research, Kotak Securities said market players are positioning for US non-farm payrolls report which may help form expectations for Fed’s monetary policy.
“The recent move shows that one job reading may not be enough to shift Fed’s tightening stance so we may not see much reaction unless the jobs report disappoints significantly,” he adds. “One should be cautious in creating fresh shorts.”
Trading Strategy
“We expect gold prices to trade sideways to down for the day with COMEX Spot gold support at $1,676 and resistance at $1,715 per ounce. MCX Gold October support lies at Rs 49,800 and resistance at Rs 50,400 per 10 grams,” said Tapan Patel, Senior Analyst (Commodities),
Securities.
Global markets
Spot gold inched up 0.1 per cent to $1,697.80 per ounce but was down 2.2 per cent for the week so far. US gold futures were flat at $1,709.10.
Spot silver dipped 0.1 per cent to $17.83 per ounce, platinum edged 0.2 per cent higher to $829.87 and palladium rose 0.3 per cent to $2,018.63.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)