Gold prices were trading flat on Friday, but were set for their biggest weekly gain in more than eight months, as positive US data boosted hopes against the Fed’s aggressive rate hikes.
US consumer prices rose less than expected in October, indicating that inflation was slowing, which raised hopes that the Fed will begin scaling back its hefty rate hikes.
Gold futures on
slipped 0.02% or Rs 9 to Rs 52,100 per 10 grams. Similarly, silver futures were flat at 0.09% or Rs 54 at Rs 61,965 per kg.
Gold is seen as a hedge against inflation, which rising rates aim to tackle, thereby diminishing the metal’s appeal. Higher interest rates also make other assets more attractive compared with non-interest-bearing bullion.
“Gold prices rallied to a more than two-month high as the US inflation report came in just a bit cooler than market expectations, pushing the US dollar index lower,” said ICICIDirect Research.
“US consumer price index (CPI) rose last month after climbing by the same margin in September,” it said. “Gold prices are expected to trade with a positive bias for the day amid a decline in the US dollar index,” he added.
On the physical front, the World Gold Council said in a note dated Friday that a stable local gold price, weak RMB and economic uncertainty supported gold sales in regions such as Beijing and Shanghai in October.
In the spot market, the highest purity gold was sold at Rs 51,514 per 10 grams while silver was priced at Rs 61,200 per kg on Thursday, according to the Indian Bullion and Jewellers Association.
The spot prices of gold have jumped more than Rs 1,400 per 10 grams in November so far, whereas spot prices of silver have jumped more than Rs 3,850 during the same period under review.
Rahul Kalantri, VP-Commodities, Mehta Equities said that the dollar index slipped below 109 marks and 10-year bond yields slipped. The US unemployment claims surged to 2,25,000 last week against expectations.
“A slightly cooler reading in the CPI print may influence the Federal Reserve’s decision-making process ahead of its December FOMC meeting,” he said.
Trading Strategy
Bullion charts have been trading in overbought zone; any time we can see profit booking in gold and silver, said Amit Khare, AVP- Research Commodities, Ganganagar Commodity. “Momentum Indicator RSI also indicates the same,” he added.
He advised traders to make fresh short potions in gold and silver with support for the yellow metal at Rs 51,800-51,500 and resistance at 52,300-52,500, whereas support for silver at Rs 61,500-61,000 and resistance at Rs 62,500-63,000.
Global markets
Spot gold was 0.2% down at $1,751.29 per ounce, as of 0240 GMT. Prices have risen 4.2% so far in the week. US.gold futures fell 0.1% to $1,752.80.
Spot silver fell 0.4% to $21.59 per ounce, but was poised for its second straight weekly rise. Platinum rose 0.2% to $1,034.31 per ounce, heading for its biggest weekly gain since February 2021. Palladium slipped 0.5% to $1,954.29.
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