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NEW DELHI: Gold prices edged higher on Thursday on the back of mild weakness in the US dollar. A widely expected interest rate hike by the US central bank sent the currency tumbling.
The US Federal Reserve on Wednesday approved a 75-basis-point interest rate hike, its largest in more than a quarter of a century, to stem a surge in inflation, and flagged a slowing economy.
Gold futures on
were trading higher, up about 0.40 per cent or Rs 202 at Rs 50,640 per 10 grams. However, silver futures gained close to 0.70 per cent or Rs 424 at Rs 61,121 per kg.
Bullion is often seen as an inflation hedge, but the opportunity cost of holding it is higher when the Fed raises short-term interest rates, as gold yields no interest.
Rahul Kalantri, VP Commodities, Mehta Equities said that bullion is holding its ground and clocked modest gains after the Federal Reserve raised interest rates and indicated aggressive rate hikes through the rest of the year to cool inflation pressures.
Markets were happy to see the Fed taking inflation seriously, he added.
In the spot market, the highest purity gold was sold at Rs 50,954 per 10 grams while silver was priced at Rs 60,750 per kg on Wednesday, according to the Indian Bullion and Jewellers Association.
The spot prices of gold have been marching towards Rs 51,000 mark after three sessions, whereas silver gained close to Rs 1,000 per kg from the previous session.
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“We expect gold prices to trade sideways to up for the day with COMEX Spot gold support at $1,810 and resistance at $1,842 per ounce. MCX Gold Aug support lies at Rs 50,100 and resistance at Rs 50,900 per 10 grams,” said Tapan Patel, Senior Analyst (Commodities),
Securities.
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Spot gold fell 0.1 per cent to $1,831.63 per ounce, as of 0235 GMT, while U.S. gold futures rose 0.8 per cent to $1,833.40.
Spot silver firmed 0.1 per cent to $21.67 per ounce, platinum gained 0.2 per cent to $940.98, and palladium rose 0.5 per cent to $1,870.79.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)