NEW DELHI: Gold prices held steady on Friday as investors awaited US inflation data due later in the day after mixed signals from Federal Reserve officials this week on interest rate hikes. After choppy trading, the yellow metal posted modest gains in domestic markets.
Fewer Americans filed new claims for unemployment benefits last week, according to data as the labour market steadily recovers from the pandemic amid a reopening economy. Investor focus now shifts to US producer price data on Friday for further clues on rising inflation.
The dollar index was little changed against a basket of currencies at 91.839, holding below a two-month high of 92.408 touched last week. Some investors view gold as a hedge against higher inflation that could follow stimulus measures.
Despite opening up the economy, the demand for physical gold in the world’s second largest bullion market remains laggard even after lifting up the shutters. Purchases have increased recently, but the major slump in overall sales is anticipated by dealers. ETF outflows also showed weaker investor interest.
Gold futures on MCX were up merely 0.07 per cent or Rs 31 at Rs 46,901 per 10 grams. Silver futures gained 0.26 per cent or Rs 177 to Rs 67,910 per kg.
“COMEX gold trades marginally higher near $1779/oz after a 0.4 per cent decline yesterday. Gold is range bound amid mixed US economic data and mixed Fed comments which has caused uncertainty about Fed’s monetary policy stance,” said Ravindra Rao,CMT, EPAT, VP- Head Commodity Research at Kotak Securities.
In the spot market, highest purity gold was sold at Rs 47,216 while silver was priced at Rs 68,123 on Thursday, according to the Indian Bullion and Jewellers Association.
“ETF outflows show weaker investor interest while supporting price is rising inflation concerns. Gold may remain choppy along with the US dollar however general bias remains weak owing to Fed’s monetary tightening outlook.”
Trading strategy
“We expect gold prices to trade sideways to up with current range. COMEX spot gold has support at $1765 and resistance at $1790 per ounce. MCX Gold August support lies at Rs. 46700 and resistance at Rs. 47200 per 10 gram,” said Tapan Patel, Senior Analyst (Commodities), HDFC Securities.
Global markets
Spot gold was flat at $1,773.52 per ounce by 0104 GMT. Prices have risen 0.6 per cent so far this week. U.S. gold futures eased 0.2 per cent to $1,773.60 per ounce.
Silver was steady at $25.87 per ounce, palladium eased 0.1 per cent to $2,614.04. Platinum climbed 0.5 per cent to $1,089.