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Gold rate today: Yellow metal flat, Silver moves higher

NEW DELHI: Tracking global cues, gold prices were little changed in the domestic market, trading almost flat on Wednesday. Asian markets were trading cautiously amid rising uncertainties triggered by China’s Evergrande debt crisis and anticipation of policy cues from the US Federal Reserve on its timeline for reducing stimulus in the world’s largest economy.

Gold futures on

were 0.03 per cent down (Rs 14) at Rs 46,624 per 10 grams. On the other hand, Silver futures were up by 0.69 per cent (Rs 420) at Rs 60,859 per kg.

Gold prices had recovered on Tuesday on risk off sentiments over China’s property market crisis.

The speculation ahead of the US FOMC and uncertainty over China’s Evergrande debt crisis has sent mixed cues to the market boosting buying in gold. The dollar index and US bond yields were steady awaiting the US FOMC outcome.

Ravindra Rao,CMT, EPAT, VP- Head Commodity Research at Kotak Securities said that gold trades changed little as market players moved to sidelines ahead of the Fed decision. Mixed ETF activity also shows lack of direction.

“Virus concerns, health of the Chinese economy and geopolitical tensions are supporting the prices. Gold has come off the lows. A sustained rise may come only if Fed fails to meet market expectations of giving a clear timeline for bond tapering,” he added.

Bullion is considered a hedge against inflation and currency debasement resulting from the widespread stimulus. A hawkish move by the Fed would diminish gold’s appeal.

The dollar index hit a near one-month high, hurting gold’s appeal for holders of other currencies. Higher interest rates raise the opportunity cost of holding non-interest bearing gold.

A pullback in domestic prices failed to revive physical gold demand in India last week, with jewellers banking on the upcoming wedding and festive season.

In the spot market, highest purity gold was sold at Rs 46,513 per 10 grams while silver was priced at Rs 60,200 per kg on Monday, according to the Indian Bullion and Jewellers Association.

The spot price of the yellow metal has declined about Rs 1,000 in the last couple of weeks, whereas Silver has shed about Rs 4,000 in the same period.

Sandeep Matta, Founder, TRADEIT Investment Advisor said “Gold registered double digit gains on yesterday’s trade as investors are looking for some hedge and safety amid Evergrande volatility which has triggered a broad-based selloff in worldwide equity markets.”

Trading strategy

“We expect gold prices to trade sideways to up for the day with COMEX Spot gold support at $1,760 and resistance at $1,795 per ounce. MCX Gold October support lies at Rs 46,200 and resistance at Rs 47,000 per 10 gram,” said Tapan Patel, Senior Analyst (Commodities), HDFC Securities.

Global markets

Spot gold was flat at $1,775.63 per ounce, as of 0120 GMT, while the US gold futures dipped 0.1% to $1,776.30.

Silver climbed 1.2% to $22.74 per ounce, while palladium edged 0.2% higher to $1,910.34. Platinum was steady at $954.28. Prices rose 4.7% on Tuesday, its biggest one-day gain since Feb. 10.

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