NEW DELHI: Gold prices slipped sharply on Thursday as the strong US dollar weighed on the sentiment. Expectations of another big rate hike from the US Federal Reserve further dented the yellow metal.
The dollar index edged towards recent peaks as hotter-than-expected inflation data boosted bets for even more aggressive monetary policy tightening by the Fed.
Gold futures on
were trading lower by 0.39 per cent or Rs 195 at Rs 49,823 per 10 grams. However, silver futures dropped 0.25 per cent or Rs 141 at Rs 56,845 per kg.
Gold is highly sensitive to rising US interest rates as they increase the opportunity cost of holding the non-yielding bullion while boosting the dollar.
ICICI Direct in its note said that gold was down on the back of a weak US dollar and 10-year treasury yields. US Federal Reserve also pressurised bullion prices, it said.
In the spot market, the highest purity gold was sold at Rs 50,300 per 10 grams while silver was priced at Rs 56,350 per kg on Wednesday, according to the Indian Bullion and Jewellers Association.
The spot prices of gold continued to remain below Rs 51,000 per 10 grams since the beginning of the ongoing month, whereas silver plunged more than Rs 900 per kg compared to the previous session.
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 $1,710 per ounce. MCX Gold October support lies at Rs 49,800 and resistance at Rs 50,300 per 10 gram,” said Tapan Patel, Senior Analyst (Commodities),
Securities.
Global markets
Spot gold was down 0.3 per cent at $1,691.63 per ounce, as of 0312 GMT, after touching its lowest since September 1 at $1,689.78 earlier in the session. US gold futures fell 0.4 per cent to $1,702.40.
Among other precious metals, spot silver shed 1.1 per cent to $19.48 per ounce, platinum fell 0.5 per cent to $900.99 and palladium slipped 0.4 per cent to $2,154.42.
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