NEW DELHI: Gold prices inched lower, little changed, on Wednesday after a tamer-than-expected rise in US inflation led to uncertainty on when the US central bank would begin tapering its asset purchases.
Gold futures on MCX were marginally down 0.10 per cent, or Rs 47, at Rs 47,213 per 10 gram. Silver futures declined 0.29 per cent, or Rs 186, at Rs 63,399 per kg.
The yellow metal rose after US CPI data came in line with expectations. The expected US CPI data will now fuel debate on Fed tapering. However, a stronger dollar may cap the upside in gold.
The data has thrown a shade of uncertainty over Federal Reserve’s taper timeline as it is due to hold a two-day monetary policy meeting next week.
Ravindra Rao, CMT, EPAT, VP – Head Commodity Research at Kotak Securities, said gold has recovered after yesterday’s gain but remains supported by choppiness in US dollar, renewed virus concerns, disappointing economic data from China, concerns about China’s regulatory crackdown and increased geopolitical tensions.
“ETF investors moved to sidelines after brief inflows earlier in the week. Gold may witness choppy trade along with the US dollar, however increasing challenges to the global economy and easing price pressure in the US may keep prices supported,” he added.
In the spot market, highest purity gold was sold at Rs 47,017 per 10 gram while silver was priced at Rs 62,806 per kg on Tuesday, according to the Indian Bullion and Jewellers Association.
The spot price of the yellow metal has declined about Rs 400 in the last one week, whereas silver has tanked up to Rs 1,300 per kg during the same period.
Sandeep Matta, Founder, TRADEIT Investment Advisor, said, “Gold moved higher after the release of Consumer Price Index which clearly indicates that inflationary pressures are still looming in the economy and it’s the right time to sit either on cash or invest in the safe heaven.”
Trading strategy
“We expect gold prices to trade sideways to up for the day with COMEX Spot gold support at $1,790 and resistance at $1,815 per ounce. MCX Gold October support lies at Rs 46,900 and resistance at Rs 46,500 per 10 gram,” said Tapan Patel, Senior Analyst (Commodities), HDFC Securities.
Global markets
Spot gold was steady at $1,802.92 per ounce as of 0318 GMT, after hitting a one-week peak of $1,808.50 on Tuesday. US gold futures eased 0.2% to $1,804.30.
Silver fell 0.3% to $23.76 per ounce. Platinum hit an over nine-month low of $926.26 and was last down 0.4% at $935.52. Palladium dipped 0.3% to $1,971.91.