The dollar index eased further from a four-week high hit earlier in the week, while most US Treasury yields fell after Yellen said that tax cuts enacted in 2017 for large corporations should be repealed. Gold is often used as a hedge against inflation and dollar debasement.
Gold futures on MCX were up 0.28 per cent or Rs 136 at Rs 49,119 per 10 grams. Silver futures added 0.39 per cent or Rs 259 to Rs 66,295 per kg.
“COMEX gold trades modestly higher near $1,845/oz after a 0.6 per cent gain yesterday. Gold is supported by correction in the US dollar index after recent gains. Comments from US Treasury Secretary nominee Janet Yellen added to market expectations of additional stimulus measures pressurizing the US dollar,” said Ravindra Rao, VP- Head Commodity Research at Kotak Securities.
“Gold may remain in the $1,800-1,860/oz range unless there are fresh triggers, however the general bias may be on the upside owing to stimulus expectations.”
In the spot market, Gold gained Rs 198 to Rs 48,480 per 10 gram in the national capital on Tuesday following a rally in international precious metal prices. Silver also marched higher by Rs 1,008 to Rs 65,340 per kilogram.
Trading strategy
“Gold prices are expected to trade sideways to up on speculations ahead of US President Joe Biden’s swearing-in ceremony. MCX Gold February futures support lies at Rs 48,800 and resistance at Rs 49,500 for the day,” said Tapan Patel, Senior Analyst (Commodities), HDFC Securities.
Global markets
Gold prices rose on Wednesday as expectations for a massive US stimulus to help the world’s largest economy recover from the coronavirus jolt enhanced bullion’s appeal as an inflation hedge and pressured the dollar.
Spot gold gained 0.5 per cent to $1,848.30 per ounce by 0239 GMT. US gold futures added 0.4 per cent to $1,847.30.
Among other precious metals, silver climbed 0.9 per cent to $25.42 an ounce. Platinum rose 1.2 per cent to $1,096.23 while palladium gained 0.4 per cent to $2,361.79.
