Tracking the rise in international prices, gold today moved higher in the Indian markets and touched its all-time high. Bullion futures on MCX climbed up to 0.15% 56,745 per 10 grams after reaching a new peak 56,850 on Friday. Silver futures rose 0.6 percent 68,970 per kg.
In global markets, gold rose 0.3% to $1,932.12 an ounce supported by a soft dollar. Expectations of an interest rate hike by the Federal Reserve also fueled the appeal of the precious metal. Among other precious metals, spot silver rose 0.4 per cent to $24.04 an ounce.
“comex gold prices “Rated for the fifth consecutive week, hitting a nine-month high of $1,939 per troy ounce in the previous week, amid a soft dollar, poor corporate earnings and increased layoffs,” Ravindra V. Rao said. Rao, VP-Head Commodity Research, Kotak Securities Ltd.
“The yellow metal has been witnessing a one-sided rally since early November, touching a 28-month low of $1,618 per troy ounce, on signs the Federal Reserve was becoming less aggressive, sliding against the greenback and US Treasury yields. Outlook US Gold prices may continue to move higher due to looming recession, easing inflation and Fed’s pivot to the labor market.”
In India, domestic prices have increased by approx. 7,000 in the last four months, tracking the return in international rates.
The Federal Reserve’s two-day meeting ending on February 1 has most market participants expecting a hike of 25 basis points. Low rates reduce the opportunity cost of holding zero-yield bullion. On the other hand, a soft US dollar makes dollar-denominated bullion attractive to buyers holding other currencies.
Traders are also monitoring the Covid situation in top gold consumer China.
According to a Reuters report, dealers in India last week offered discounts of up to $24 an ounce over official domestic prices, down from $35 the previous week. India imports most of its gold requirement and domestic prices include import duty and 3% GST.
“Support for gold lies at $1912-1898 while resistance lies at $1940-1951. Silver has found support at $23.65-23.48, while resistance lies at $24.10-24.28. Gold has support in terms of rupee 56,510-56,380, while at the resistance level 56,940, 57,140. support on silver 68,050-67,520, while at the resistance level 68,950-69,580,” said Rahul Kalantri, VP Commodities, Mehta Equities Ltd. (with agency inputs)
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