NEW DELHI: Gold prices gained mildly on Thursday as the yellow metal cheered the fall in US treasury yields after US consumer price data suggested inflation might have peaked in April. A weaker dollar makes gold attractive for overseas buyers, while lower Treasury yields reduce the opportunity cost of holding zero-yield bullion.
Gold futures on
were trading higher by 0.18 per cent or Rs 93 up at Rs 50,915 per 10 grams. However, silver futures dropped about 0.37 per cent or Rs 227 to Rs 60,526 per kg.
The dollar fell, lifting demand for greenback-priced gold, after economic data showed inflation remained high but was unlikely to lead the US central bank to shift to a more aggressive path of monetary policy.
Pritam Patnaik, Head – Commodities, Axis Securities said gold prices received a much required respite in yesterday’s day of trade. This was largely thanks to the softer US Treasury yields and a downbeat dollar index.
“This was a little surprising given the fact that the US inflation data came in higher than market expectations, which would ideally cement the Fed’s hawkish stance,” he added.
In the spot market, highest purity gold was sold at Rs 51,205 per 10 gram while silver was priced at Rs 61,450 per kg on Wednesday, according to the Indian Bullion and Jewellers Association.
The spot prices of gold have remained below Rs 52,000 per 10 gram for almost two weeks, whereas the silver has plunged more than Rs 3,700 per kg in the same period under review.
US inflation slowed on a year-on-year basis last month, giving investors some hope that price surges are peaking, said Ravi Singh, Vice President and Head of Research, ShareIndia.
“However, the core inflation, excluding items such as oil prices was higher than expected. Gold prices showed a knee jerk reaction but then recovered the losses,” he added.
Trading strategy
“We expect gold prices to trade sideways to up for the day with COMEX Spot gold support at $1,830 and resistance at $1,870 per ounce. MCX Gold June futures support lies at Rs 50,300 and resistance at Rs 51,200 per 10 gram,” said Tapan Patel, Senior Analyst (Commodities),
Securities.
Global markets
Spot gold was up 0.2 per cent at $1,855.11 per ounce, having risen as much as 1.1 per cent in the previous session. US gold futures rose 0.2 per cent to $1,856.90.
Spot silver was up 0.1 per cent to $21.57 per ounce, while platinum dipped 0.2 per cent to $990.64, and palladium fell 0.7 per cent to $2,021.16.