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Gold rate today: Yellow metal, silver decline on Dhanteras; Fed meet in focus

Gold rate today: Yellow metal, silver decline on Dhanteras; Fed meet in focus

02 Nov 2021

NEW DELHI: Gold prices edged lower on Tuesday as a firm dollar made the bullion less appealing for holders of other currencies. That said, investors are eyeing a pivotal US Federal Reserve policy meeting.

The Federal Reserve’s two-day policy meeting concludes on Wednesday as investors will seek cues on tapering amid growing concerns over a sustained bout of inflation.

Gold futures on MCX shed 0.15 per cent or Rs 74 to Rs 47,829 per 10 grams. Silver futures were down 0.22 per cent or Rs 141 at Rs 64,650 per kg.

Gold is traditionally seen as an inflation hedge. However, reduced stimulus and interest rate hikes to combat such inflationary pressure tend to push government bond yields up, raising the opportunity cost of non-interest-bearing gold.

Ravindra Rao, CMT, EPAT, VP- Head Commodity Research at Kotak Securities said mixed US and Chinese economic data, lower bond yields and continuing inflation and growth worries supported the gold.

“However, weighing on price is strength in equities, lack of investor buying and rebound in US dollar amid positioning ahead of the US Fed decision,” he added.

Physical gold was sold at a premium in India last week as consumers flocked to retailers ahead of big festivals, while premiums in top consumer China dropped.

In the spot market, the highest purity gold was sold at Rs 47,776 per 10 grams while silver was priced at Rs 64,368 per kg on Monday, according to the Indian Bullion and Jewellers Association.

The spot price of gold has remained flat in the last two weeks, whereas silver has jumped about Rs 2,000 per kg during the period under review.

Ravi Singh, Vice President & Head of Research, Share India said it is ‘Dhanteras’ today, a significant Hindu occasion, when people usually purchase gold and silver in the form of jewellery and utensils.

“This year, we expect to witness a surge in the sale of gold and silver jewellery. Lot of offers and discounts are also in the market by jewellers to attract customers,” he added.

Trading strategy
“We expect gold prices to trade sideways to up for the day with COMEX Spot gold support at $1,775 per ounce and resistance at $1,810 per ounce. MCX Gold December support lies at Rs 47,600 per 10 gram and resistance at Rs 48,100 per 10 gram,” said Tapan Patel, Senior Analyst (Commodities), HDFC Securities.

Global markets
Spot gold was down 0.2 per cent at $1,789.58 per ounce, as of 0158 GMT. US gold futures dropped 0.2 per cent to $1,791.50.

Spot silver fell 0.2 per cent to $23.98 per ounce. Platinum dropped 0.7 per cent to $1,056.58, while palladium was flat at $2,047.26.