New Delhi: Gold prices edged higher on Monday as the weakness in the US dollar supported the yellow metal. However, profit booking after a sharp rise in the previous session weighed on the bullion’s sentiments.

Investors are focused on the US inflation data due later this week. The data is likely to shed some light on Fed’s rate-hike move in the December meeting.

Gold futures on

were trading flat, up by 0.11% or Rs 54 at Rs 50,920 per 10 grams. Similarly, silver futures tanked by 0.31% or Rs 185 at Rs 60,353 per kg.

Although gold is considered a hedge against inflation, higher interest rates increase the opportunity cost of holding the non-yielding asset.

ICICIDirect Research said that gold prices jumped as the US dollar slipped after disappointing unemployment data from the country.

“Gold prices are expected to trade with a positive bias for the day amid weakness in the US dollar,” it said. “The unemployment rate in the US increased by 0.2 percentage point to 3.7% in October 2022,” it added.

On a physical front, the World Gold Council said in a note on Friday, a stable local gold price, weak RMB and economic uncertainty supported gold sales in regions such as Beijing and Shanghai in October.

In the spot market on Friday, the highest purity gold was sold at Rs 50,522 per 10 grams while silver was priced at Rs 58,755 per kg, according to the Indian Bullion and Jewellers Association.

The spot prices of gold have dropped more than Rs 1,250 per 10 grams in the last four weeks, whereas the spot prices of silver have gained more than Rs 2,100 per kg in the same period under review.

Trading Strategy

Amit Khare, AVP- Research Commodities, Ganganagar Commodity, said that bullion’s charts are showing some profit booking in daily charts, with a downside possible in the coming days. Momentum Indicator RSI is also indicating the same, he said.

He advised traders to make fresh short potions in gold with a support of Rs 50,700-50,500 and resistance at Rs 51,000-51,250, whereas for silver support lies at Rs 59,500-59,000 and resistance at 60,800-61,200.

Global markets

Spot gold was down 0.6% at $1,670.29 per ounce, as of 0230 GMT. Bullion prices surged 3% on Friday as the dollar fell nearly 2%. US gold futures edged 0.1% lower to $1,674.30.

Spot silver was down 2% at $20.43, platinum fell 1.5% to $946.45 and palladium lost 0.6% to $1,851.68.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)