New Delhi: Gold prices were trading flat on Tuesday after touching their lowest levels in more than one week. The dollar held firm ahead of the US Federal Reserve’s policy meeting, where another rate hike is expected.
US central bankers are expected to continue their inflation fight, even as a debate over when to downshift to smaller interest rate hikes to avoid sending the world’s biggest economy into a tailspin intensifies.
Gold futures on
were rose by 0.01% or Rs 4 at Rs 50,325 per 10 grams. Similarly, silver futures were trading higher by 0.75% or Rs 432 at Rs 58,110 per kg.
Gold is considered a hedge against inflation, while higher interest rates increase the opportunity cost of holding zero-yield bullion.
Gold prices lost ground as caution kicked in ahead of the US Federal Reserve meeting where it is expected to hike rates by 75 bps, said ICICIDirect Research.
“However, weaker than expected Chicago PMI from the US supported bullion prices,” it said. “Gold prices are expected to trade with a negative bias for the day amid a strong US dollar,” it added.
Top gold consumer China’s economy rebounded at a faster-than-anticipated clip in the third quarter, but a more robust revival in the longer term will be challenged by persistent COVID-19 curbs, a prolonged property slump and global recession risks.
In the spot market, the highest purity gold was sold at Rs 50,480 per 10 grams while silver was priced at Rs 57,350 per kg on Monday, according to the Indian Bullion and Jewellers Association.
The spot prices of gold have remained below Rs 51,000 for three weeks, whereas the silver in the spot market has eased about Rs 5,500 per kg during the same period under review.
Sriram Iyer, Senior Research Analyst,
Securities, said that international gold and silver ended weaker on Monday as the dollar and Treasury Yields rose amid prospects for of more rate hikes from the US Fed.
“Domestic gold and silver rose on Monday tracking rupee’s weakness,” he said. “Looking ahead, international gold and silver started flat this Tuesday morning,” he added.
Bullion’s structure is showing weakness on the daily chart, with a downside possible in the coming days. said Amit Khare, AVP- Research Commodities, Ganganagar Commodity. “Momentum Indicator RSI also indicates the same,” he said.
He advised traders to make fresh short potions in gold and silver with support for the yellow metal at Rs 50,150-50,000 and resistance at 50,500-50,600, whereas support for silver at Rs 57,000-56500 and resistance at Rs 58,000-58,500.
Spot gold was listless at $1,633.69 per ounce, as of 0059 GMT, having earlier touched its lowest level since October 21. US gold futures fell 0.3 per cent to $1,636.30.
Spot silver rose 0.2% to $19.18 per ounce, platinum dipped 0.1% to $924.51 and palladium gained 0.9% to $1,856.91.
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