NEW DELHI: Gold prices were trading marginally higher but in a tight range on Tuesday as investors maintained a cautious stance ahead of this week’s policy meeting by the Federal Reserve.
The US central bank is expected to hike rates aggressively in an effort to curb inflation. Inflation concerns have prompted other central banks across the globe to tighten monetary policy.
Gold futures on
were trading higher by 0.29 per cent or Rs 143 at Rs 49,445 per 10 grams. Silver futures gained sharply by 0.70 per cent or Rs 399 to Rs 57,083 per kg.
The US Fed, at the conclusion of its two-day policy meeting on Wednesday, is expected to raise interest rates by 75 basis points (bps), with market participants even seeing a 19 per cent chance for a 100 bps increase, Reuters reported.
Gold is known as a safe investment amid inflation woes, but high-interest rates increase the opportunity cost of holding non-yielding bullion.
Physical gold demand picked up in India as domestic prices fell ahead of key festivals, while premiums in China climbed further as its currency weakened.
In the spot market, the highest purity gold was sold at Rs 49,320 per 10 grams while silver was priced at Rs 56,354 per kg on Monday, according to the Indian Bullion and Jewellers Association.
The spot prices of gold have remained below Rs 50,000 per 10 grams for straight three sessions, whereas silver has gained more than Rs 1,200 over the previous session.
Rahul Kalantri, VP Commodities, Mehta Equities said gold and silver prices came off their intra-day lows as higher US dollar index and rising bond yields limited buying interest in the precious metals to start the trading week.
Trading Strategy
“We expect gold prices to trade sideways to down for the day with COMEX Spot gold support at $1,660 and resistance at $1,690 per ounce. MCX Gold October support lies at Rs 49,000 and resistance at Rs 49,600 per 10 grams,” said Tapan Patel, Senior Analyst (Commodities),
Securities.
Global markets
Spot gold held its ground at $1,674.34 per ounce, as of 0205 GMT. US gold futures rose 0.3 per cent at $1,683.10.
Elsewhere, spot silver lost 0.9 per cent to $19.43 per ounce. Platinum was flat at $919.40 and palladium was down 1.4 per cent at $2,193.53.
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