Domestic gold futures fluctuated between gains and losses on Tuesday but managed to hold the Rs 49,000 per 10 grams mark, as a stronger dollar overseas made the yellow metal less attractive for those holding other currencies. Investors awaited US inflation data for more clarity on the interest rate trajectory in the world’s largest economy going forward.
MCX gold futures for delivery on August 5 gyrated in a Rs 418 range, between Rs 48,932 and Rs 49,350, on Tuesday before settling at Rs 49,113 per 10 grams, down by Rs 30 or 0.06 per cent for the day.
MCX silver futures for delivery on July 5 were rangebound between Rs 70,980 and Rs 71,799 during the session, before ending the day at Rs 71,225, down by Rs 592 or 0.82 per cent from their previous close.
Spot gold (22 carat) became dearer by Rs 190 to settle at Rs 48,320 per 10 grams in the national capital. Silver followed suit, rising by Rs 125 to Rs 70,227 per kilogram.
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In the international market, spot gold was down 0.44 per cent at $1,890.92 per ounce and spot silver 0.90 per cent at $27.63 per ounce.
The dollar index — which gauges the greenback against six major peers — quoted firm above the 90 mark, and was last seen trading up 0.15 per cent at 90.08. The rupee declined by nine paise to end at 72.89 against the dollar.
On Dalal Street, benchmark indices took a breather and retreated from record high levels amid profit booking seen in heavyweights such as HDFC twins and Reliance Industries, providing some support to bullion prices. The S&P BSE Sensex index ended 52.94 points or 0.10 per cent lower at 52,275.57 and the broader NSE Nifty 50 benchmark settled at 15,740.10, down 11.55 points or 0.07 per cent from its previous close.
Typically, gains in equities boost the risk appetite of investors, rendering safe-haven bets such as gold less attractive, and vice versa.
Analysts say higher US consumer inflation could spark some fears over tapering of monetary policy by the US central bank, putting pressure on bullion rates.
“Positive economic data last week and comments from US Treasury Secretary on the $4 trillion budget plan, underplaying inflation, have weighed on the metal prices,” said Navneet Damani, VP-Commodities Research, Motilal Oswal Financial Services.
Damani said he expects Comex gold to move in a broader range of $1,883-1,908 in the near term. On MCX, the yellow metal could hover between Rs 48,850 and Rs 49,250, he added.
Market participants will watch the US consumer price index reading closely to assess the Fed’s policy moves in the near term.
MCX gold has support at Rs 48,980-48,750 and resistance at Rs 49,330-49,550, according to Manoj Kumar Jain, Director-Head of Commodity Research, Prithvi Finmart. Silver has support at Rs 71,200-70,700 and resistance at Rs 72,200-73,000, he added.
“Gold is trading with a marginal sideways and negative bias near $1,900, and may rise and test resistance at $1,912-$1,918,” said Kshitij Purohit, Lead Currency & Commodities, CapitalVia Global Research. On the domestic front, MCX gold August futures have risen from the support levels of Rs 48,400-48,600 and may continue to rise till Rs 49,350-49,400 levels, he added.
Jain suggests buying gold on dips around Rs 49,000 for a target of Rs 49,550 with a stop loss at Rs 48,750, and going long on silver around Rs 71,300 for a goal of Rs 72,500 with a stop loss at Rs 70,600.