Expectations of around a 100-basis point rate hike surged after US annual consumer prices saw their sharpest spike in more than four decades in June. However, traders dialled down those bets following recent weak economic readings.
Gold futures on
were trading marginally up by 0.10 per cent or Rs 50 at Rs 50,586 per 10 grams. However, silver futures jumped by 0.28 per cent or Rs 153 at Rs 54,560 per kg.
The dollar slipped for the fourth straight session, down 0.2 per cent against its rivals, making gold less expensive for buyers holding other currencies. Rising interest rates increase the opportunity cost of holding non-yielding bullion.
In the spot market, the highest purity gold was sold at Rs 50,911 per 10 grams while silver was priced at Rs 54,727 per kg on Monday, according to the Indian Bullion and Jewellers Association.
The spot prices of gold have jumped about Rs 1,000 per 10 grams in the last two sessions, whereas silver has rallied more than Rs 800 per kg in the same period.
“Gold participants are waiting for the Fed’s outcome to decide the gold prices move. Markets are currently expecting to see a 75-basis point hike,” said Ravi Singh, Vice President and Head of Research, ShareIndia.
A more aggressive move may support the US dollar and weigh on gold, he said, adding that persistently high inflation and growth fears, however, would support gold prices, giving it room to move higher in the near term.
Singh from Share India has suggested trades to buy gold above Rs 50,650 for a target price of Rs 50,900, whereas they can sell the yellow metal below Rs 50,350 with a target price of Rs 50,000.
Spot gold was up 0.3 per cent at $1,724.45 per ounce. US gold futures gained 0.3 per cent to $1,723.60 per ounce.
Elsewhere, spot silver rose 0.6 per cent to $18.52 per ounce, platinum gained 0.8 per cent to $886 and palladium was steady at $2,009.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)