Investors are betting that the newly renominated Fed Chairman Jerome Powell will need to step up the pace at which the central bank is normalizing monetary policy to better grapple with surging consumer prices. This is negatively affecting gold prices.
Gold futures on MCX were up 0.33 per cent or Rs 158 at Rs 47,592 per 10 grams. Silver futures rose 0.32 per cent or Rs 200 to Rs 62,709 per kg.
“Gold prices fell to a near three-week low on Tuesday as the renomination of US Federal Reserve Chair Jerome Powell fuelled bets of faster interest rate hikes, bolstering the dollar and Treasury yields. Investors are betting Powell will step up the pace at which the central bank is normalizing monetary policy to better grapple with surging consumer prices,” said Vidit Garg, Director, MyGoldKart.
In the spot market, the highest purity gold was sold at Rs 47,826 while silver was priced at Rs 63,781 on Tuesday, according to the Indian Bullion and Jewellers Association.
Trading strategy
“Gold is expected to remain in the negative territory for a few more trading sessions. All the momentum indicators like RSI, MACD, Moving Averages and Stochastic are showing downtrend in intraday and daily charts. There is also nothing expected this week which may trigger fresh safe haven appeal. We advise investors to remain cautious and avoid taking fresh long positions before the sentiments turn around. Buy zone above Rs 47,700 for the target of Rs 48,000. Sell zone below Rs 47,300 for the target of Rs 47,000,” said Ravi Singh, Vice President & Head of Research, ShareIndia.
Global markets
Spot gold rose 0.3 per cent to $1,794.96 per ounce by 0239 GMT, after slipping as much as 1.4 per cent to its lowest since Nov. 5 on Tuesday. U.S. gold futures added 0.6 per cent to $1,793.90 per ounce.
Indicative of sentiment, SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, said its holdings rose 0.6 per cent to 991.11 tonnes on Tuesday from 985 tonnes on Monday.
Spot silver fell 0.3 per cent to $23.58 per ounce. Platinum rose 1.1 per cent to $979.99 and palladium gained 1.2 per cent to $1,890.21.
