NEW DELHI: Gold prices gained on Wednesday after US Federal Reserve Chair Jerome Powell promised not to raise interest rates too quickly based only on the fear of coming inflation. The yellow metal pared losses in domestic markets as well.
Powell on Tuesday reaffirmed the US central bank’s intent to encourage a “broad and inclusive” recovery of the job market. However, an uptick in the dollar kept prices of yellow metals in check.
Benchmark 10-year Treasuries yields inched lower after Powell said there would be no Fed rate hike before recovery. The dollar index rose mildly against its rivals, making gold more expensive for holders of other currencies.
Gold purchases in India have inched up recently, after a decline in local rates, although dealers foresee a major slump in sales in the world’s second largest bullion market. Gold imports have dropped recently, according to official figures.
Gold futures on MCX were up 0.21 per cent or Rs 101 at Rs 47,112 per 10 grams. Silver futures gained 0.51 per cent or Rs 345 to Rs 67,860 per kg.
“Gold prices traded firm with spot gold prices at COMEX were trading near $1781 per ounce in the morning trade. The yellow metal pared previous losses after FED Chairman Jerome Powell warned that the economic recovery requires more time before stimulus unwinding,” Tapan Patel, Senior Analyst (Commodities), HDFC Securities.
In the spot market, highest purity gold was sold at Rs 47,312 while silver was priced at Rs 68,198 on Tuesday, according to the Indian Bullion and Jewellers Association.
“We expect gold prices to trade sideways to up for the day with COMEX Spot gold support at $1765 and resistance at $1800 per ounce. MCX Gold August support lies at Rs 46,800 and resistance at Rs. 47300 per 10 gram,” said Patel of HDFC Securities.
Spot gold was up 0.1 per cent at $1,780.06 per ounce, as of 0103 GMT. U.S. gold futures were steady at $1,777.60 per ounce.
Silver gained 0.2 per cent at $25.80 per ounce, palladium eased 0.2 per cent to $2,552.68. Platinum climbed 0.1 per cent to $1,080.63.