Gold prices today gain above Rs 48,000 snapping a falling spree

NEW DELHI: Gold and silver futures prices took a break from sliding and gained on Tuesday on increasing hopes of coronavirus aid supported by international prices.

The main driver for gold is the confidence around US President Joe Biden’s relief bill and the expectation of a further weakening of the US dollar which will come as a result of the aid. Gold is considered as a hedge against inflation and currency debasement, likely from widespread stimulus.

Gold futures on MCX were up 0.38 per cent or Rs 181 at Rs 48,020 per 10 grams. Silver futures added 0.15 per cent or Rs 104 to Rs 70,125 per kg.

“Gold trades higher, supported by correction in the US dollar index from recent highs and increased expectations of US stimulus. However, weighing on price is ETF outflows and higher US bond yields and improved risk sentiment. Gold has recovered from recent lows, however a sustained rise may come only if US dollar corrects sharply,” said Ravindra Rao, VP- Head Commodity Research at Kotak Securities.

In the spot market, gold prices on Monday gained Rs 94 to Rs 46,877 per 10 gram, supported by recovery in international prices. Silver also jumped Rs 340 to Rs 68,391 per kg.

Trading strategy

“We expect gold prices to trade sideways to up for the day with support at $1,810 per ounce and resistance at $1,860 per ounce in the international market. MCX Gold April futures support lies at Rs 47,500 per 10 gram and resistance at Rs 48,200 per 10 gram,” said Tapan Patel, Senior Analyst (Commodities), HDFC Securities.

Global markets

Gold prices rose to a near one-week high on Tuesday as the dollar faltered and expectations firmed that a massive US fiscal stimulus to revive the world’s largest economy will soon be passed.

Spot gold rose 0.6 per cent to $1,841.11 per ounce by 0304 GMT, having hit $1,842.30 earlier in the session, its highest since Feb. 3. US gold futures gained 0.4 per cent to $1,841.70.

Among other precious metals, spot silver gained 1 per cent to $27.53 an ounce, palladium climbed 0.4 per cent to $2,339.33. Platinum rose 1.7 per cent to $1,176.80, having earlier hit its highest since August 2016 at $1,180.50.

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