Gold rate today: Yellow metal inches up ahead of Fed meet; silver tops Rs 69,000 on MCX

New Delhi: Gold prices were trading mildly higher on Wednesday as investors awaited the US Federal Reserve's rate-hike decision later in the day.

Bullion prices also got a boost from after a smaller-than-expected rise in the US consumer prices.

The US consumer prices barely rose in November amid decline in the cost of gasoline and used cars, leading to the smallest annual increase in inflation in nearly a year.

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Gold futures on MCX were trading higher by 0.16% or Rs 85 at Rs 54,828 per 10 grams. Silver futures jumped 0.40% or Rs 276 at Rs 69,051 per kg.

NS Ramaswamy, Head of Commodities, Ventura Securities, said that gold prices were firm on the back of US inflation data as market participants await the outcome of the Federal Reserve policy meeting.

"The dollar index fell sharply to below 104 after data showing a smaller-than-expected rise in U.S. consumer prices supported the yellow metal," he said.

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 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.

In the spot market, thehighest purity gold was sold at Rs 54,030 per 10 grams while silver was priced at Rs 67,161 per kg on Tuesday, according to the Indian Bullion and Jewellers Association.

The spot prices of gold have jumped about Rs 1,750 per 10 grams in the last one month, whereas silver has gained more than Rs 5,800 per kg during the same period under review.

Saumil Gandhi, Senior Analyst (Commodities), HDFC Securities, said, "Gold prices hit a more than five-month high on Tuesday after a smaller-than-expected rise in US consumer prices buoyed bets for a slowdown in rate hikes from the Fed."

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Trading Strategy
“Bullioncharts are now showing some profit booking and looking overbought. Momentum indicator RSI is 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 55,000-55,200 and Rs 69,000-69,500, respectively. He also advised profit booking near support levels at Rs 54,400-54,000 and Rs 68,300-67,400, respectively.

Global markets
Spot gold was little changed at $1,809.35 per ounce, as of 0046 GMT. US gold futures were down 0.2% at $1,821.10.

Spot silver fell 0.3% to $23.65, platinum lost 0.2% to $1,031.13 and palladium was down 0.2% to $1,925.20.

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