New Delhi: Gold prices edged lower on Friday, adding more to the weekly decline, following the red-hot inflation numbers in the US, which increased the possibility of another aggressive rate hike from the US Federal Reserve.
Data released on Thursday showed US consumer prices increased more than expected in September, as rents surge by the most since 1990 and the cost of food also rose, with core CPI jumping 6.6 per cent on an annual basis
Gold futures on
were trading marginally lower by 0.10 per cent or Rs 58 at Rs 50,831 per 10 grams. However, silver futures were trading higher by 0.32 per cent or Rs 180 at Rs 57,320 per kg.
Gold is considered as a hedge against inflation and economic uncertainties, rising interest rates reduce the appeal of the asset, which pays no interest.
Gold prices dropped to a two-week low on Thursday as a higher-than-expected rise in US September inflation cemented bets, the Federal Reserve will persist with aggressive interest rate hikes, said ICICI Direct Research in its morning note.
“However, weakness in the US dollar index restricted further downside in the bullion prices,” it said. “Gold prices are expected to trade with a positive bias for the day amid weak US dollar,” it added.
Physical gold prices flipped to a discount in India last week as elevated local rates amid a dive in the rupee dampened festive demand, with higher prices playing spoilsport across other Asian hubs as well
On the physical front, Standard Chartered said in a note that with festival-wedding buying starting in India, demand would continue to firm, but was not expected to be as strong as in the fourth quarter of 2021.
In the spot market, highest purity gold was sold at Rs 50,869 per 10 grams while silver was priced at Rs 57,086 per kg on Thursday, according to the Indian Bullion and Jewellers Association.
The spot prices of gold have dropped almost Rs 1,000 per 10 grams in the last one week, whereas Silver has plunged almost Rs 3,800 per kg during the same period under review.
Gold retailing platform Augmont has launched its third stop for ‘sell old gold’ business in Guntur district in Andhra Pradesh. It was launched on Thursday, October 13. The early two stops were Mumbai and Hyderabad.
Trading Strategy
Gold has support at $1,658-1,645, while resistance at $1,682-1,695. Silver has support at $18.74.-18.55, while resistance is at $19.22-19.45, said Rahul Kalantri, VP Commodities, Mehta Equities.
“In Rupee terms gold has support at Rs 50,720-50,540, while resistance is at Rs 51,210, 51,350. Silver has support at Rs 56,750-56,240, while resistance is at Rs 57,880–58,450,” he added.
Global markets
Spot gold fell 0.3 per cent to $1,660.10 per ounce, as of 0123 GMT. US gold futures dropped 0.6 per cent to $1,666.80.
Spot silver dipped 0.3 per cent to $18.81 per ounce, platinum fell 0.5 per cent to $891.67 and palladium was 0.3 per cent lower at $2,101.77.
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