Gold rate today: Yellow metal edges higher; silver marches towards Rs 68,000

New Delhi: Gold prices traded higher on Monday as a tepid US dollar made the bullion less expensive for overseas buyers. That said, the prospects of further interest rate hikes by the US Federal Reserve next year kept gains in check.

Bullion registered its biggest weekly decline since mid-November on Friday after Fed Chair Jerome Powell said that the US central bank would deliver more hikes next year, despite growing recession worries.

Gold futures on MCX were trading higher by 0.21% or Rs 115 at Rs 54,415 per 10 grams. Silver futures jumped 0.39% or Rs 261 at Rs 67,911 per kg.

NS Ramaswamy, Head of Commodities, Ventura Securities, said that gold is trading positively as the market participants have been expecting more interest rate hikes in the next year by the US Federal Reserve.

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 prices edged up as the US services PMI slumped to 44.4 in December 2022, well below market expectations of 46.8. The latest data signalled the fastest pace of contraction in the service sector for four months, said ICICI Direct Research.

"Sharp upside was capped on rise in US treasury yields and strong US dollar," it said. "Gold prices are expected to trade with a negative bias for the day amid strong dollar and rise in US treasury yields," it added.

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.

India plans to invite bids to extract gold from 50 million tonnes of processed ore in a cluster of colonial-era mines in the southern state of Karnataka, PTI reported citing a government official with direct knowledge of the matter.

In the spot market, the highest purity gold was sold at Rs 53,998 per 10 grams while silver was priced at Rs 66,065 per kg on Friday, according to the Indian Bullion and Jewellers Association.

The spot prices of gold have remained below Rs 54,000 per 10 grams for straight two sessions, whereas silver has breached Rs 67,000 per kg mark after three sessions.

Trading Strategy
"We expect bullion prices to remain volatile in today’s session. Gold has support at $1778-1765 while resistance is at $1805-1815. Silver has support at $22.92-22.75, while resistance is at $23.48-23.65," said Rahul Kalantri, VP Commodities, Mehta Equities.

"In rupee terms, gold has support at Rs 54,120-53,950, while resistance is at Rs 54,480, 54,650. Silver has support at Rs 67,250-66,880, while resistance is at Rs 68,520–68,980," he added.

Global markets
Spot gold was up 0.1% at $1,794.60 per ounce, as of 0226 GMT. US gold futures rose 0.2% at $1,804.00. The dollar index slipped 0.1%.

Spot silver gained 0.3% to $23.29, platinum rose 0.5% to $996.36 and palladium was up 0.7% at $1,726.20.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)