New Delhi: Gold prices edged up on Tuesday on the back of a softer dollar, although prices moved in a tight range as investors maintained caution ahead of US inflation data and the Federal Reserve’s policy decision.
Focus shifts on to the US consumer price index (CPI) data for November due later in the day and the US central bank’s final meeting of this year scheduled on December 13-14.
NS Ramaswamy, Head of Commodities,
Securities, said, “The US Federal Reserve is expected to hike interest rates by 50 basis points at its final meeting of 2022”.
Goldman Sachs expects gold, with its real demand drivers, to outperform the highly volatile bitcoin in the long term, Reuters reported citing the bank’s research note.
Gold futures on
were trading mildly higher, rising 0.12% or Rs 65 at Rs 54,197 per 10 grams. Silver futures jumped 0.56% or Rs 381 at Rs 68,167 per kg.
High-interest rates have weighed on gold’s traditional status as a hedge against inflation and other uncertainties this year, as they translate into a higher opportunity cost of holding the non-yielding metal.
Gold premiums in China rose last week as demand picked up after the top consumer eased COVID-19 restrictions, while high prices muted activity in India.
In the spot market, the highest purity gold was sold at Rs 53,908 per 10 grams while silver was priced at Rs 67,022 per kg on Monday, according to the Indian Bullion and Jewellers Association.
The spot prices of gold have jumped about Rs 1,500 per 10 grams in the last three weeks, whereas silver has gained more than Rs 6,600 per kg during the same period under review.
“Investors stayed on the sidelines ahead of US inflation data and a series of central bank meetings across the world, including the Federal Reserve,” said ICICI Direct. “Bullion prices were pressured by strong US dollar and US treasury yields,” it added.
Gold prices are expected to trade with a negative bias for the day amid a rise in risk appetite in the global markets, it added. “Sharp downside may be capped as investors are anticipating softer inflation and smaller interest rate hikes,” said ICICI Direct
Trading Strategy
“Bullion charts are now showing some profit booking and looking overbought. Momentum Indicator RSI is also indicating the same,” said Amit Khare, AVP- Research Commodities, Ganganagar Commodity. He advised traders to make fresh short positions.
He suggested selling gold and silver near given resistance levels at Rs 54,200-54,400 and Rs 68,000-68,600, respectively. He also advised profit booking near support levels at Rs 54,000-53,700 and Rs 67,200-66,000, respectively.
Global markets
Spot gold gained 0.3% to $1,785.78 per ounce, as of 0302 GMT. US gold futures were up 0.3% at $1,796.50.
Spot silver rose 0.6% to $23.44, platinum was up 0.4% to $1,005.88 and palladium ticked 0.1% higher to $1,889.50.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)
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