The dollar recouped most of those losses on Friday and began the final quarter of 2021 at close to its highest level of the year.
Gold futures on MCX were eased mildly 0.08 per cent or Rs 39 at Rs 46,482 per 10 gram. Also, ailver futures were down by 0.21 per cent, or Rs 128, at Rs 59,489 per kg.
The yellow metal witnessed a strong rebound on Thursday on inflation worries despite firm US bond yields. The rising oil prices along with power shortage may result into higher input costs.
Ravindra Rao, CMT, EPAT, VP- Head Commodity Research at Kotak Securities, said gold remains pressurized by the firm US dollar, Fed’s monetary tightening expectations and weaker investor interest.
“However, global growth worries amid mixed economic data, rising inflation concerns amid higher inflationary pressure and increasing concerns about the Chinese economy supported the prices of yellow metal. Weakness in equities has also increased gold’s appeal as an alternative asset,” he added.
Bank of Japan policymakers in September saw rising risks to the economy from slowing Chinese growth, semiconductor shortages and Southeast Asian factory shutdowns, which could affect growth projections at its next policy-setting meeting.
Gold is traditionally seen as an inflation hedge, although reduced central bank stimulus and interest rate hikes tend to push government bond yields up, in turn translating into a higher opportunity cost for gold that pays no interest.
In the spot market, highest purity gold was sold at Rs 45,851 per 10 gram while silver was priced at Rs 58,118 per kg, according to the Indian Bullion and Jewellers Association.
The spot price of the yellow metal has been under pressure, hovering near a month and a half lows. Gold breached the Rs 46,000 mark whereas silver slipped below Rs 59,000 during the previous session.
Sandeep Matta, Founder, TRADEIT Investment Advisor said, “The precious metal has witnessed sharp short coving and bargain hunters stepped into buying the counter post Federal Reserve Chairman mentioned that the US is still far from full employment.”
Trading strategy
“We expect gold prices to trade sideways to up for the day with COMEX Spot gold support at $1,740 and resistance at $1,770 per ounce. MCX Gold December support lies at Rs 46,200 and resistance at Rs 46,800 per 10 gram,” said Tapan Patel, Senior Analyst (Commodities), HDFC Securities.
Global markets
Spot gold fell 0.1% to $1,754.64 per ounce by 0139 GMT, after rising nearly 1.8% on Thursday as the dollar index slipped. US gold futures dropped 0.1% to $1,755.90.
Silver fell 0.6% to $22.06 per ounce. Platinum was down 0.9% to $954.51 and palladium edged 0.1% lower to $1,907.96.
