Gold futures on
were trading higher, gaining 0.21% or Rs 108 at Rs 52,400 per 10 grams. Similarly, silver futures jumped 0.83% or Rs 505 to Rs 61,140 per kg.
Gold is seen as a hedge against inflation, which rising rates aim to tackle, thereby diminishing the metal’s appeal. Higher interest rates also make other assets more attractive compared with non-interest-bearing bullion.
Gold prices fell for a third straight session on Monday amid a rise in the US dollar index while the market’s attention turned to the Fed’s November meeting minutes due to the holiday-shortened week, said ICICIDirect Research.
Bullion prices were pressurised as major central banks globally continued to look to increase interest rates, it added. “Gold prices are expected to trade with a negative bias for the day amid a strong US dollar and surge in treasury yields.”
Investors also kept a close tab on the economic fallout from fresh COVID-19 restrictions in China. Chinese physical gold premiums fell sharply last week as buying slowed.
Physical gold dealers in India were forced to offer the biggest discounts in four months last week as a jump in domestic prices hit demand, while Chinese premiums fell sharply as buying slowed.
In the spot market, the highest purity gold was sold at Rs 52,406 per 10 grams while silver was priced at Rs 60,442 per kg on Monday, according to the Indian Bullion and Jewellers Association.
The spot prices of gold have slipped about Rs 500 per 10 grams in just three sessions, whereas spot prices of silver have tumbled over Rs 2,150 per kg during the same period under review.
Ravindra V Rao, CMT, EPAT VP-Head Commodity Research Kotak Securities said gold has been in a corrective mode for the last three sessions as the US dollar recovered from its lows.
Mixed statements by Fed officials have created ambiguity on Fed’s stance on interest rate decisions and helped dollar recovery, he added. “Focus will now shift to flash PMI numbers from US and Europe tomorrow along with the FOMC meeting minutes.”
“Bullion charts are looking positive. Meanwhile, momentum indicator RSI is also indicating the same,” said Amit Khare, AVP- Research Commodities, Ganganagar Commodity. He advised traders to make fresh buy position in gold and silver.
He suggested to buy gold and silver near given support levels of Rs 52,000-52,000 and Rs 60,400-60,000, respectively. He also advised profit booking near resistance levels at Rs 52,500-52,650 and Rs 61,200 and Rs 61,800, respectively.
Spot gold rose 0.3% to $1,743.07 per ounce by 0215 GMT. U.S. gold futures gained 0.3% to $1,744.50.
Silver advanced 1% to $21.05 per ounce, platinum added 1.2% to $993.50, while palladium rose 0.4% to $1,872.25.
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