NEW DELHI: Gold prices struggled on Wednesday thanks to a stronger dollar which dented bullion’s appeal ahead of much-awaited inflation data scheduled later in the day.
The Fed hiked rates by 75 basis points each in June and July to rein in soaring inflation. Although gold is seen as a hedge against inflation, higher US interest rates dull non-yielding bullion’s appeal.
Gold futures on
were trading lower by 0.24 per cent or Rs 124 at Rs 52,365 per 10 grams. However, silver futures declined 0.25 per cent or Rs 141 at Rs 58,650 per kg.
Pritam Patnaik, Head – Commodities, Axis Securities gold traders remain a little cautious as they are awaiting US CPI data, due later in the day, as this will be the guiding factor for the Fed’s policy initiatives, to tackle inflation.
“With both the dollar index and bond yields holding steady, gold prices will face some headwinds in the near term,” he added. “That said, the long-term up-move remains very much on the cards.”
In the spot market, the highest purity gold was sold at Rs 52,184 per 10 grams while silver was priced at Rs 58,106 per kg on Monday, according to the Indian Bullion and Jewellers Association.
The spot prices of gold have jumped about Rs 1,300 per 10 grams in the last two weeks, whereas silver has gained more than Rs 3,400 per kg in the same period under review.
Trading Strategy
“We expect gold prices to trade sideways to up for the day with COMEX Spot gold support at $1,780 and resistance at $1,810 per ounce. MCX Gold October support lies at Rs 52,100 and resistance at Rs 52,800 per 10 gram,” said Tapan Patel, Senior Analyst (Commodities),
Securities.
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Spot gold held its ground at $1,793.39 per ounce after hitting its highest since July 5 at $1,800.29 on Tuesday. US gold futures were down 0.1 per cent at $1,810.
Spot silver eased 0.2 per cent to $20.47 per ounce, platinum fell 0.4 per cent to $930.14, and palladium edged 0.1 per cent higher to $2,217.40.
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