Gold prices rose on Thursday after the minutes from the US Federal Reserve’s latest policy meeting signalled slower interest rate hikes.
The majority of the US Fed policymakers agreed it would ‘likely soon be appropriate’ to slow the pace of interest rate hikes, the readout of the November 1-2 meeting showed.
Gold futures on
were trading higher, rising about 0.47% or Rs 244 at Rs 52,695 per 10 grams. Similarly, silver futures soared 1.16% or Rs 715 at Rs 62,345 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 to non-interest-bearing bullion.
Gold prices rose amid weakness in the dollar and decline in US treasury yields, said ICICIDirect Research. “It rallied as FOMC meeting minutes showed that most of the officials favoured slowing the pace of interest rate hike,” it said.
Gold prices are expected to trade with a positive bias for the day amid a soft dollar and decline in US treasury yields, it added. “Demand for safe haven may rise as investors are worried that the global economy is deteriorating,” it added.
Physical gold demand in Asia stayed soft this week, as premiums in China eased further as fresh COVID-19 restrictions dimmed activity, while higher domestic prices put off most buyers in India.
In the spot market, the highest purity gold was sold at Rs 52,418 per 10 grams while silver was priced at Rs 61,700 per kg on Wednesday, according to the Indian Bullion and Jewellers Association.
The spot prices of gold have slipped more than Rs 2,300 per 10 grams in the last three weeks, whereas spot prices of silver have jumped over Rs 4,700 per kg during the same period under review.
Gold and silver prices rose and closed above key levels on Thursday, benefiting from a weaker dollar as the minutes of the Federal Reserve’s latest meeting showed that a growing number of members supported a slower pace of interest rate hikes, said Rahul Kalantri, VP Commodities, Mehta Equities.
“Precious metals prices jumped into positive territory as flash manufacturing and service-sector PMI data fell into contraction territory,” he added.
“Bullion’s charts are looking positive. Momentum indicator RSI also indicates the same,” said Amit Khare, AVP- Research Commodities, Ganganagar Commodity. He advised traders to make fresh buy positions in gold and silver.
He suggested buying gold and silver near given support levels at Rs 52,200-52,000 and Rs 61,200-60,700, respectively. He also advised profit booking near resistance levels at Rs 52,600-52,800 and Rs 62,000 and Rs 62,500, respectively.
Market activity could be relatively muted by the US Thanksgiving holiday. Spot gold rose 0.3% to $1,754.08 per ounce by 0033 GMT. US gold futures advanced 0.5% to $1,754.30.
Spot silver rose 0.3% to $21.59 per ounce, platinum added 0.3% to $998.80, while palladium gained 0.6% to $1,892.67.
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