NEW DELHI: Gold and silver futures prices in the domestic market edged higher on Thursday amid violence and political uncertainties in the US and after Democrats gained majority in the US Senate.
Democrat victories in two Georgia races cleared the way for a larger fiscal stimulus under President-elect Joe Biden. Many investors view bullion as a hedge against inflation and currency debasement that they fear could result from large stimulus measures.
Gold futures on MCX were up 0.50 per cent or Rs 254 at Rs 50,763 per 10 grams. Silver futures added 0.20 per cent or Rs 136 to Rs 69,553 per kg. The profit booking comes after four straight days of gains.
“Gold trades higher as Democrats win in the US Senate has boosted market expectations of additional stimulus. Fed’s cautious tone on the US economy and disappointing ADP jobs report has added to expectations of more stimulus measures. However, weighing on price is the rise in US 10-year bond yield to March highs and progress on the vaccine front with the EU approving the Moderna vaccine,” said Ravindra Rao, VP- Head Commodity Research at Kotak Securities.
“Gold may witness choppy trade as it struggles to build momentum above $1,900/oz level however the general trend remains positive due to the weaker US dollar.”
In the spot market, Gold prices in the national capital fell Rs 71 to Rs 51,125 per 10 grams on Wednesday amid rupee appreciation, according to HDFC Securities. Silver, however, gained Rs 156 to Rs 70,082 per kg.
Trading strategy
“Gold prices are expected to trade in current range despite the weaker dollar on US presidential election drama. The rally in equity indices may keep upside limited for the day. COMEX gold prices have important support at $1,900 per ounce and resistance at $1940 per ounce. MCX Gold February support lies at Rs 50,200 per 10 gram and resistance at Rs 51,100 per 10 gram,” said Tapan Patel, Senior Analyst (Commodities), HDFC Securities.
Global markets
Gold prices edged lower on Thursday as firmer Treasury yields eclipsed support from a Democrat sweep in Georgia Senate runoffs that boosted hopes for more stimulus.
Spot gold eased 0.1 per cent to $1,916.77 per ounce by 0250 GMT, after declining more than 1.5 per cent in the previous session. US gold futures climbed 0.5 per cent to $1,918.40.
Among other precious metals, silver shed 1 per cent to $27.03 an ounce. Platinum eased 0.9 per cent to $1,091.75, while palladium rose 0.1 per cent to $2,441.18.