NEW DELHI: Gold prices were trading higher on Monday, thanks to the pullback in the US dollar.
The dollar slipped against its rivals, moving further away from a near 20-year high hit last week, making greenback-priced bullion less expensive for buyers holding other currencies.
Gold futures on
were trading higher about 0.45 per cent or Rs 223 at Rs 50,330 per 10 grams. Silver futures traded up by 0.67 per cent or Rs 370 at Rs 55,957 per kg.
goldpricetoday
Fed officials on Friday said that they would stick to a 75 bps rate increase at their July 26-27 meeting to combat soaring inflation.
The European Central Bank (ECB), meanwhile, is expected to raise rates by 25 bps at its policy meeting later this week. Although gold is seen as an inflation hedge, higher interest rates hurt the appeal of bullion, which bears no interest.
Ravindra Rao, VP- Head Commodity Research, Kotak Securities said the US currency has come off as comments from Fed officials and easing of inflation expectations eased concerns about a bigger rate hike by the Fed at the upcoming meeting.
“The US currency has also lost momentum amid position squaring ahead of Bank of Japan and European central bank meetings this week,” he added. “General bias may be on the downside unless we see a substantial correction in the US dollar.”
In the spot market, the highest purity gold was sold at Rs 50,403 per 10 grams while silver was priced at Rs 54,767 per kg on Friday, according to the Indian Bullion and Jewellers Association.
The spot prices of gold have plunged more than Rs 1,900 per 10 grams in the last nine trading sessions, whereas silver has lost about Rs 3,400 per kg in the same period of review.
Trading Strategy
We expect gold prices to trade sideways to up for the day with COMEX Spot gold support at $1,700 and resistance at $1,730 per ounce. MCX Gold August support lies at Rs 49,900 and resistance at Rs 50,700 per 10 grams, said Tapan Patel, Senior Analyst (Commodities),
securities.
Global markets
Spot gold had climbed 0.4 per cent to $1,713.49 per ounce after falling to its lowest in nearly a year last week. US gold futures gained 0.5 per cent to $1,711.80.
Elsewhere, spot silver rose 0.4 per cent to $18.76 per ounce, platinum gained 0.8 per cent to $857.30, and palladium climbed 2.2 per cent to $1,869.10.
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