NEW DELHI: Gold prices ticked marginally higher on Wednesday supported by a pullback in the US dollar. All eyes were on the US Federal Reserve’s outlook on the future pace of interest rate hikes at the central bank’s policy outcome later in the day.
Investors widely expect the Fed to raise its benchmark overnight interest rate by 75 basis points, the fourth such increase in a row. Also, US job openings unexpectedly rose in September, suggesting demand for labour remained strong.
Gold futures on
were trading higher by 0.12% or Rs 62 at Rs 50,564 per 10 grams. Similarly, silver futures were trading higher by 0.20 or Rs 115 at Rs 58,961 per kg.
Gold is highly sensitive to rising US interest rates, as that increases the opportunity cost of holding the non-yielding metal and boosts the dollar.
Falling US Treasury yields supported the precious metals, said Rahul Kalantri, VP-Commodities, Mehta Equities. “Some potentially positive news coming out from China is also positive for the metals market.”
The bullion market is holding on to modest gains even as the US labour market remained healthy with the number of jobs available, he added. “Traders are looking ahead to the FOMC meeting that is ending later in the day.”
In the spot market, the highest purity gold was sold at Rs 50,691 per 10 grams while silver was priced at Rs 59,048 per kg on Tuesday, according to the Indian Bullion and Jewellers Association.
The spot prices of gold have jumped as much as Rs 1,050 in the last 10 days, whereas silver in the spot market has advanced about Rs 3,500 per kg during the same period under review.
Sriram Iyer, Senior Research Analyst at
Securities said that traders expect the central bank to deliver another 75 bps rate hike in November, but the odds are rising that it may slow the pace of rate hike increases in December.
“Data was mixed as Jolts job openings unexpectedly rose in September, while ISM Manufacturing PMI fell in October,” he added. “Gold and silver started flat to marginally higher this Wednesday morning ahead of the US Fed meeting.”
Trading Strategy
Bullion structure is showing some profit booking now on the daily chart, with a downside possible in the coming days, said Amit Khare, AVP- Research Commodities, Ganganagar Commodity.
“Momentum Indicator RSI also indicates the same,” he added. “Traders are advised to make fresh short potions in Gold and Silver near given resistance levels and book near support levels.”
He advised traders to make fresh short potions in gold and silver, with support for the yellow metal at Rs 50,300-50,000 and resistance at 50,600-50,900, whereas support for silver at Rs 58,300-57500 and resistance at Rs 59,600-60,000.
Global markets
Spot gold was up 0.2% at $1,650.13 per ounce, as of 0100 GMT, while US gold futures also gained 0.2% to $1,652.10.
Spot silver fell 0.1% to $19.63 per ounce, having hit a three-week peak on Tuesday. Platinum rose 0.4% to $946.18 and palladium was 0.5% higher at $1,889.47.
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