Gold rate today: Yellow metal trades flat; silver slips below Rs 55,000

NEW DELHI: Gold prices traded flat on Tuesday, with mild gains, thanks to a slight pullback in the US dollar. However, possibility of aggressive US Fed hikes capped the gains for the yellow metal.

US Fed chair Jerome Powell will address the annual global central banking conference in Jackson Hole, Wyoming, on Friday, a highly anticipated speech that could signal how high US borrowing costs may go.

Gold futures on

were trading flat, marginally up by 0.01 per cent or Rs 7 at Rs 51,170 per 10 grams. However, silver futures dropped 0.17 per cent or Rs 96 at Rs 54,896 per kg.

Higher interest rates increase the opportunity cost of holding non-yielding bullion. The dollar rose to a more one-month high against its rivals, making gold more expensive for buyers holding other currencies. Benchmark treasury yields rose to their highest in a month, increasing the opportunity cost of holding gold.

Rahul Kalantri, VP Commodities, Mehta Equities said gold and silver prices remained under pressure at a one-month low, as risk-aversion underpins the US dollar ahead of Fed Chair Powell’s Jackson Hole appearance.

“The dollar index climbed for the fourth straight session and reached six-week highs after the Fed official’s hawkish comments on raising interest rates,” he added. “The US 10-year bond yields rose and pushed precious metals lower.”

Gold demand in India improved last week as domestic prices dropped to a more than two-week low, while volumes were sombre in other Asian centres.

In the spot market, the highest purity gold was sold at Rs 51,396 per 10 grams while silver was priced at Rs 55,110 per kg on Monday, according to the Indian Bullion and Jewellers Association.

The spot prices of gold have dropped about Rs 800 per 10 grams in the last two weeks, whereas silver tumbled about Rs 3,000 per kg in the same period under review.

Pritam Patnaik, Head – Commodities, Axis Securities said gold prices continued their southward movement thanks to a stronger US dollar and rising 10-year bond yields.

“Gold prices have been correcting in the last seven trading sessions, as the USD hit its 6-week high levels, aided by fears of recession and hawkish US Fed,” he added.

Trading Strategy
“We expect gold prices to trade sideways to down for the day with COMEX Spot gold support at $1,720 and resistance at $1,752 per ounce. MCX Gold October support lies at Rs 50,800 and resistance at Rs 51,600 per 10 grams,” said Tapan Patel, Senior Analyst (Commodities),

Securities.

Global markets
Spot gold was up 0.2 per cent at $1,738.79 per ounce, as of 0325 GMT, after hitting its lowest since July 27 at $1,727.01 on Monday. US gold futures gained 0.1 per cent to $1,750.50.

Spot silver fell 0.2 per cent to $18.97 per ounce, platinum was steady at $875.81, and palladium climbed 1.4 per cent to $2,023.20.

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