New Delhi: Gold prices were trading flat on Wednesday as investors assessed mixed signals including a slightly weaker dollar, rising treasury yields and hawkish commentary from the Federal Reserve.
Bullion has had a tepid week so far, scraping modest gains as the greenback’s strength fades slightly. The US currency remains a headwind as the Federal Reserve pursues an aggressive monetary policy to battle inflation.
Gold futures on
dropped mildly by 0.04% at Rs 50,394 per 10 grams. However, silver futures were trading marginally higher by 0.04% at Rs 56,378 per kg.
Gold is considered a hedge against inflation and economic uncertainties, rising interest rates reduce the appeal of the asset, which pays no interest.
ICICI Direct Research said that gold prices traded flat despite a drop in US 10 years treasury yields. “Bullion prices were pressured by prospects of further large Federal Reserve interest rate hikes,” it said.
Physical gold buying improved in India last week as prices cooled ahead of the Dhanteras and Diwali festivals later this month, while Chinese premiums stayed elevated amid robust demand.
In the spot market, thehighest purity gold was sold at Rs 50,362 per 10 grams while silver was priced at Rs 56,010 per kg on Tuesday, according to the Indian Bullion and Jewellers Association.
The spot prices of gold have remained below Rs 51,000 per 10 grams in the last six sessions, whereas silver has plunged almost Rs 3,000 per kg during the same period under review.
Gold has been trading flat since the American currency showed signs of exhaustion at the top. However, the hawkish Fed is capping gains in the yellow precious metal, said Ravindra Rao, CMT, EPAT, VP- Head Commodity Research, Kotak Securities.
“ETF outflows continue, however, the pace has reduced as indicated by holdings in the SPDR gold trust,” he said. “ETF holdings are witnessing outflows as investors are worried about bullion’s performance amid Fed’s aggressive monetary policy stance,” he added.
“Gold has support at $1640-1628, while resistance is at $1,662-1,674. Silver has support at $18.20-17.90, while resistance is at $18.82-18.99,” said Rahul Kalantri, VP Commodities, Mehta Equities.
“In rupee terms, gold has support at Rs 50,180-49,940, while resistance is at Rs 50,610, 51,780. Silver has support at Rs 55,480-54,910, while resistance is at Rs 56,980–57,510,” he added.
Spot gold was down 0.1% at $1,650.75 per ounce, as of 01.25 GMT. US gold futures were up 0.1% at $1,657.30.
Spot silver eased 0.2% to $18.72 per ounce, platinum was 0.3 per cent higher at $909.88 and palladium rose 0.3% to $2,019.75.
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