NEW DELHI: Gold prices inched up on Friday but were set for a fourth consecutive monthly drop, pressured by the strong performance of the greenback and rising US bond yields. However, the metal is set for its best week since mid-May.
The US economy unexpectedly contracted in the second quarter, raising risks of an economic slowdown, which lifted gold’s safe-haven allure.
Gold futures on
were trading higher by 0.12 per cent or Rs 62 at Rs 51,505 per 10 grams. However, silver futures jumped more than 0.59 per cent or Rs 341 to Rs 57,960 per kg.
Bullion is unlikely to stave off its worst run of monthly losses since November 2020. The dollar has spent most of July hovering around 20-year highs, hammering demand for greenback-priced gold among other currency holders.
Gold prices gained after US Federal Reserve chair Jerome Powell signalled the central bank could slow the pace of rate hikes in coming months, said ICICIDirect in its morning report.
“Disappointing macroeconomic data from the US lifted demand for precious metals,” it added. “The US economy unexpectedly contracted in the second quarter, with consumer spending growing at its slowest pace in two years.”
In the spot market, the highest purity gold was sold at Rs 51,222 per 10 grams while silver was priced at Rs 55,972 per kg on Thursday, according to the Indian Bullion and Jewellers Association.
The spot prices of gold have jumped Rs 1,250 per 10 grams in the last one week, whereas silver advanced to Rs 2,100 per kg in the same period under review.
Gold as a safe haven is attractive due to soaring inflation and deepening fear of recession, said Ravi Singh, Vice President and Head of Research, ShareIndia.
“As long as the two factors continue to dominate markets for sentiment – a scenario for a further uptrend in gold price remains intact. It is a good opportunity to go long on every dip,” he added.
“We expect gold prices to trade sideways to up for the day with COMEX Spot gold support at $1,740 and resistance at $1,770 per ounce. MCX Gold August support lies at Rs 50,900 and resistance at Rs 51,600 per 10 grams,” said Tapan Patel, Senior Analyst (Commodities),
Spot gold inched up 0.2 per cent to $1,758.94 per ounce. US gold futures rose 0.3 per cent to $1,775.10. The metal rose 1.9 per cent since mid-May.
Spot silver firmed 0.3 per cent to $20.04 per ounce, while platinum eased 0.2 per cent to $886.24. Both face monthly losses. Palladium rose 0.8 per cent to $2,095.13 and has gained about 8.2 per cent this month, its best since January.
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