Gold rate today: Yellow metal hits 5 month high, silver tops Rs 67,000 on MCX

New Delhi: Gold prices rose on Monday, hitting new 5 month highs on the back of weaker US Dollar and renewed interest in bullion after partial relaxations in Covid-19 restrictions by China.

US employers hired more workers than expected in November and increased wages, shrugging off mounting worries of a recession, but that will probably not stop the US Fed from slowing the pace of its interest rate hikes.

“Gold prices are expected to trade with a positive bias for the day amid weakness in dollar and decline in US treasury yields,” said ICICIDirect. "Investors will remain cautious ahead of ISM Services PMI data," it added.

Gold futures on MCX were trading higher, rising 0.40% or Rs 216 at Rs 54,066 per 10 grams. However, silver futures soared higher by 1.06% or Rs 706 at Rs 67,155 per kg.

Deveya Gaglani, Research Analyst, Axis Securities, said that gold prices rallied last week after a correction in the dollar index. "Gold is glittering again and it has regained its safe-haven appeal and set to touch a new high next year," he said.

Gold is seen as a hedge against inflation, which rising rates aim to tackle, thereby diminishing the metal's appeal. Higher interest rates also make other assets more attractive compared with non-interest-bearing bullion.

Physical gold demand stalled in India last week on higher prices, while premiums fell in top consumer China as Covid-19 restrictions dulled activity.

Rahul Kalantri, VP Commodities, Mehta Equities, said that gold and silver prices were steady in early Monday trades despite stronger-than-expected US jobs data indicating more potential interest rate hikes.

"While US nonfarm payrolls grew more than expected in November, markets appeared to be sticking to the Federal Reserve’s message that interest rates will rise at a slower pace in the coming months," he added.

Trading Strategy
“Bullions charts are now showing some profit booking and looking overbought, Momentum Indicator RSI also indicating the same,” said Amit Khare, AVP- Research Commodities, Ganganagar Commodity. He advised traders to make fresh short positions.

He suggested selling gold and silver near given resistance levels at Rs 54,000-54,200 and Rs 66,800-67,200, respectively. He also advised profit booking near support levels at Rs 53,700-53,500 and Rs 66,000-66,500, respectively.

Global markets
Spot gold was up 0.5% at $1,807.21 per ounce, as of 0233 GMT, after climbing to its highest level since July 5 at $1,808.20 earlier in the session. US gold futures gained 0.6% to $1,819.60.

Spot silver gained 1.1% to $23.37, platinum rose 1.1% to $1,024.96 and palladium edged up 0.7% to $1,911.82.

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