AgenciesNew Delhi: Gold prices ticked higher on Tuesday, ignoring the firmer dollar and lingering worries about further rate hikes from the US Federal Reserve.
Last week, Fed Chair Jerome Powell said that the US Central Bank will deliver more interest rate hikes next year to curb inflation. Other major central banks have also highlighted a similar hawkish stance.
Gold futures on MCX were trading higher by 0.28% or Rs 154 at Rs 54,414 per 10 grams. Silver futures jumped 0.29% or Rs 187 at Rs 67,699 per kg.
“Gold prices dropped on Monday amid a surge in US 10-year treasury yields. Further, expectations of more rate hikes from the US Federal Reserve dented the non-yielding bullion’s appeal,” said ICICIDirect Research.
"Gold prices are expected to trade with a negative bias for the day amid a rise in US treasury yields. A sharp downside in prices may be cushioned on weakness in the dollar and pessimistic global market sentiments," it added.
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.
ICICI Direct Research said that gold prices edged up as 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, it added.
"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.
In the spot market, the highest purity gold was sold at Rs 54,248 per 10 grams while silver was priced at Rs 66,898 per kg on Monday, according to the Indian Bullion and Jewellers Association.
The spot prices of gold have jumped about Rs 1,400 per 10 grams in the last three weeks, whereas silver has breached Rs 4,800 per kg in the same period under review.
NS Ramaswamy, Head of Commodities, Ventura Securities said that gold is trading in a narrow range as a stronger dollar and uncertainty about future rate hikes from the US Federal Reserve dampened the non-yielding bullion’s outlook.
“The local market remained in premium during the first week of the month but it went back into discount after retail demand weakened following the price jump,” he said. "Retail demand is expected to slow by January," he added.
Trading Strategy
“We expect bullion prices to remain volatile in today’s session. Gold has support at $1,774-1,762 while resistance at $1,804-1,812. Silver has support at $22.82-22.55, while resistance is at $23.48-23.65,” said Rahul Kalantri, VP Commodities, Mehta Equities.
"In Rupee terms, gold has support at Rs 54,050-53,850, while resistance is at Rs 54,480-54,650. Silver has support at Rs 67,050-66,580, while resistance is at Rs 68,020–68,480," he added.
Global markets
Spot gold was down 0.1% at $1,785.98 per ounce, as of 0217 GMT. US gold futures fell 0.1% at $1,795.10. The dollar index edged 0.1% higher.
Spot silver edged up 0.4% to $23.04, platinum rose 0.1% to $981.06 and palladium was up 0.3% at $1,674.84.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)
Last week, Fed Chair Jerome Powell said that the US Central Bank will deliver more interest rate hikes next year to curb inflation. Other major central banks have also highlighted a similar hawkish stance.
Gold futures on MCX were trading higher by 0.28% or Rs 154 at Rs 54,414 per 10 grams. Silver futures jumped 0.29% or Rs 187 at Rs 67,699 per kg.
“Gold prices dropped on Monday amid a surge in US 10-year treasury yields. Further, expectations of more rate hikes from the US Federal Reserve dented the non-yielding bullion’s appeal,” said ICICIDirect Research.
"Gold prices are expected to trade with a negative bias for the day amid a rise in US treasury yields. A sharp downside in prices may be cushioned on weakness in the dollar and pessimistic global market sentiments," it added.
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.
ICICI Direct Research said that gold prices edged up as 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, it added.
"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.
In the spot market, the highest purity gold was sold at Rs 54,248 per 10 grams while silver was priced at Rs 66,898 per kg on Monday, according to the Indian Bullion and Jewellers Association.
The spot prices of gold have jumped about Rs 1,400 per 10 grams in the last three weeks, whereas silver has breached Rs 4,800 per kg in the same period under review.
NS Ramaswamy, Head of Commodities, Ventura Securities said that gold is trading in a narrow range as a stronger dollar and uncertainty about future rate hikes from the US Federal Reserve dampened the non-yielding bullion’s outlook.
“The local market remained in premium during the first week of the month but it went back into discount after retail demand weakened following the price jump,” he said. "Retail demand is expected to slow by January," he added.
Trading Strategy
“We expect bullion prices to remain volatile in today’s session. Gold has support at $1,774-1,762 while resistance at $1,804-1,812. Silver has support at $22.82-22.55, while resistance is at $23.48-23.65,” said Rahul Kalantri, VP Commodities, Mehta Equities.
"In Rupee terms, gold has support at Rs 54,050-53,850, while resistance is at Rs 54,480-54,650. Silver has support at Rs 67,050-66,580, while resistance is at Rs 68,020–68,480," he added.
Global markets
Spot gold was down 0.1% at $1,785.98 per ounce, as of 0217 GMT. US gold futures fell 0.1% at $1,795.10. The dollar index edged 0.1% higher.
Spot silver edged up 0.4% to $23.04, platinum rose 0.1% to $981.06 and palladium was up 0.3% at $1,674.84.
(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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...moreDownload The Economic Times News App to get Daily Market Updates & Live Business News.
Subscribe to The Economic Times Prime and read the Economic Times ePaper Online.and Sensex Today.
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