NEW DELHI: Gold prices were trading higher on Tuesday, supported by weaker US dollar and Treasury yields, as traders awaited December inflation data and weighed bets for quicker interest rate hikes.
Markets anticipate quicker rate hikes based on key December US inflation data due later this week and Jerome Powells’s testimony in the evening, while stronger bond yields continued to cap gains.
Gold futures on MCX gained 0.17 per cent or Rs 81 at Rs 47,536 per 10 grams. Silver futures were up by 0.20 per cent or Rs 123 at Rs 60,790 per kg.
Gold is considered a hedge against high inflation, but the metal is highly sensitive to rising U.S. interest rates which increase the opportunity cost of holding non-yielding bullion.
In the spot market, the highest purity gold was sold at Rs 47,627 per 10 grams while silver was priced at Rs 60,351 per kg on Monday, according to the Indian Bullion and Jewellers Association.
The spot prices of gold have remained under Rs 48,000 for almost a week, whereas Silver made a quick recovery after breaching Rs 60,000 levels in the previous session.
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 $1,820 per ounce. MCX Gold February support lies at Rs 47,200 and resistance at Rs 47,700 per 10 gram,” said Tapan Patel, Senior Analyst (Commodities), HDFC Securities.
Global markets
Spot gold rose 0.3 per cent to $1,806.00 per ounce by 0232 GMT. US gold futures were up 0.3 per cent at $1,804.90.
Spot silver was up 0.4 per cent to $22.55 an ounce, platinum gained 1 per cent to $949.28, and palladium rose 0.5 per cent to $1,921.74.