Gold rate: Yellow metal dips marginally, silver kisses Rs 74,000
18 May 2021
NEW DELHI: Gold prices on Tuesday rose to their highest in more than three months as a weaker U.S. dollar and growing inflationary pressure lifted bullion’s appeal as an inflation hedge. Precious metals continued the northward movement in the Indian market.
Investors now await minutes of the U.S. Fed’s last meeting, due on Wednesday, for more cues on the U.S. central bank’s monetary policy.
Recent economic readings out of the United States have sparked concerns over rising inflation and raised bets over an earlier-than-expected Federal Reserve rate hike. Gold tends to benefit from a lower interest rate environment as it reduces the opportunity cost of holding non-yielding bullion.
The dollar index was down 0.082 per cent, with the euro at $1.2157. The dollar teetered near multi-month lows against European currencies. A weaker greenback makes gold more appealing for other currency holders.
Gold prices in India continued the uptrend on the back of global cues. However, shops in major states remained locked due to restrictions imposed by local government, reducing the demand for physical gold in the world’s second-largest bullion consumer.
Gold futures on MCX were up by 0.07 per cent or Rs 33 at Rs 48,441 per 10 grams. Silver futures gained 0.92 per cent or Rs 676 to Rs 74,000 per kg.
“Gold prices traded higher with spot gold prices at COMEX were trading near $1867 per ounce in the morning trade. The yellow metal rallied on Monday giving breakout of short term trend line above $1860. Gold prices were supported by weaker dollar amid disappointed US and Chinese data,” said Tapan Patel, Senior Analyst (Commodities), HDFC Securities.
In the spot market, highest purity gold was sold at Rs 48,146 while silver was priced at Rs 71,735 on Monday, according to the Indian Bullion and Jewellers Association.
“We expect gold prices to trade sideways to up for the day with COMEX gold support at $1850 per ounce and resistance at $1876/1890 per ounce. MCX Gold June futures support lies at Rs 48000 and resistance at Rs 48700 per 10 gram,” said Patel of HDFC Securities.
Spot gold traded around $1,871.46 an ounce, near a three-and-a-half month high, after the Empire State Manufacturing Survey, by the New York Fed, showed the highest prices paid since the series began in 2001.
Palladium gained 0.3 per cent to $2,911 per ounce, silver rose 0.2 per cent to $28.23 and platinum edged 0.2 per cent higher to $1,242.27.