Gold prices posted their biggest weekly gain since March 2020 last week after signs of cooling US inflation lifted hopes the Fed could be less hawkish on rate hikes.
Gold futures on
were trading flat, up by 0.06% or Rs 34 at Rs 52,368 per 10 grams in early trade today. Similarly, silver futures climbed 0.23% or Rs 140 to Rs 61,711 per kg.
Gold is seen as a hedge against inflation but higher interest rates make other assets more attractive compared with non-interest-bearing bullion.
Gold prices extended their gains on Friday as signs of cooling US inflation boosted bets that the Federal Reserve would be less hawkish on rate hikes, going forward, said ICICIDirect Research.
“Moreover, inflation data triggered a sharp fall in the US dollar, which was headed for its biggest two-day drop in almost 14 years,” it added. “Gold prices are expected to trade with a positive bias for the day amid a decline in the US dollar index.”
A spike in domestic prices put off gold consumers in India last week and prompted dealers to offer discounts, with higher rates playing spoilsport in China as well.
In the spot market, the highest purity gold was sold at Rs 52,281 per 10 grams while silver was priced at Rs 61,354 per kg on Friday, according to the Indian Bullion and Jewellers Association.
The spot prices of gold have jumped as much as Rs 1,800 per 10 grams in the last two weeks, whereas spot prices of silver have jumped almost Rs 4,000 per kg during the same period under review.
“Bullion charts are trading in the overbought zone. Any time we can see profit booking in gold and silver. Momentum Indicator RSI is also indicating the same,” said Amit Khare, AVP- Research Commodities, Ganganagar Commodity.
He advised traders to make fresh short potions in gold and silver with support for the yellow metal at Rs 52,000-51,700 and resistance at Rs 52,600-52,900, whereas support for silver is at Rs 61,000-60,000 and resistance at Rs 62,100-62,800.
Spot gold slipped 0.5% to $1,761.86 per ounce, as of 0239 GMT, after hitting its highest since Aug. 18 on Friday. U.S. gold futures eased 0.3% to $1,764.80.
Elsewhere, silver fell 0.8% to $21.51 per ounce. Platinum eased 0.5% to $1,028.38 and palladium dipped 0.9% to $2,021.91.
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