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NEW DELHI: Gold prices were flat on Monday, bucking the weak trend in the international market. Yellow metal was set for their biggest monthly drop since last September.
Gold remained under pressure as the US dollar strengthened ahead of key central bank meetings, making bullion more expensive for holders of other currencies.
Gold futures on MCX were flat, up by merely 0.01 per cent or Rs 5 at Rs 47,590 per 10 grams. Silver futures gained marginally by 0.02 per cent or Rs 12 at Rs 61,046 per kg.
The US Federal Reserve plans to raise interest rates in March on the assumption that the economy will largely steer clear of a fallout from the Omicron coronavirus variant and keep growing at a healthy clip.
Gold is considered a hedge against inflation, interest rate hikes would raise the opportunity cost of holding non-yielding bullion.
Gold is all set for one of the worst price closing after the Fed signaled a more aggressive stance and pushed the dollar higher. Moving forward all eyes will be on Payroll data coming this week, said Vidit Garg, Director, MyGoldKart.
Top Asian hubs saw firm demand for physical gold last week in the run-up to the Lunar New Year holiday, while buyers in India held off making purchases before the government announced its annual budget.
India’s gold demand surged to 78.6 per cent in 2021 which shows a recovery in consumer sentiments and dull demand post Covid.
In the spot market, highest purity gold was sold at Rs 47,915 per 10 grams while silver was priced at Rs 61,220per kg on Friday, according to the Indian Bullion and Jewellers Association.
The spot prices of gold have eased about Rs 950 per 10 grams in the last three sessions, whereas Silver has dropped more than Rs 3,200 per kg in the last four sessions.
Trading strategy
However, gold prices in MCX was not able to sustain around Rs 49,000 levels due to Fed’s rate hike decision and may consolidate at current levels for some trading days, said Ravi Singh, Vice President and Head of Research, ShareIndia.
He advised to buy gold near Rs 47,800 for the target of Rs 48,000 and sell below Rs 47,500 for the target of Rs 47,300.
Global markets
Spot gold was down 0.2 per cent at $1,788.41 per ounce, as of 0140 GMT, hovering near the previous session’s $1,779.20 – its lowest since December 16. US gold futures were up 0.1 per cent at $1,788.20. The metal has declined more than 2 per cent so far this month.
Spot silver shed 0.3 per cent to $22.36 an ounce, while platinum was up 0.1 per cent at $1,008.27. Palladium fell 0.5 per cent to $2,364.49, but the auto-catalyst metal was set for its best monthly gain since February 2008, up about 25 per cent.