Gold rate today: Yellow metal slips to clutch Rs 53,000 on MCX; silver declines sharply

New Delhi: Gold prices edged lower on Monday as a strong US dollar made the greenback-priced metal more expensive for buyers holding other currencies.

The market participants are expecting a 50 basis-point interest rate increase at the Federal Reserve’s December meeting after minutes of the US Central Bank’s last policy meeting signalled a slower pace of rate hikes.

Gold futures on

were trading lower, shedding 0.13% or Rs 67 at Rs 53,023 per 10 grams. Similarly, silver futures tanked 0.59% or Rs 362 at Rs 61,314 per kg.

Gold is seen as a hedge against inflation, which rising rates aim to tackle, thereby diminishing the metal’s appeal. Higher interest rates also make other assets more attractive compared with non-interest-bearing bullion.

Gold prices edged lower amid rebound in the US dollar index and uptick in the US 10-year treasury yields, said ICICIDirect. “Gold prices are expected to trade with a negative bias,” it said.

The broker said that sharp downside may be cushioned on expectations that the US Fed may slow the pace of interest rate hikes from December. “China reported a new daily record for COVID-19 infections,” it added.

In the spot market, the highest purity gold was sold at Rs 52,660 per 10 grams while silver was priced at Rs 61,829 per kg on Friday, according to the Indian Bullion and Jewellers Association.

The spot prices of gold have remained above Rs 52,000 per 10 grams for more than two weeks now, whereas silver is lingering near Rs 62,000 per kg mark.

Rahul Kalantri, VP-Commodities, Mehta Equities, said that gold and silver prices gained last week post dovish remarks from the US Fed officials in the November meeting minutes.

“The US Fed officials signalled the slow pace of interest rate hikes going ahead, which pushed the dollar index and the US bond yields lower and supported precious metal prices,” he said.

Trading Strategy

“Bullion charts are looking positive. Momentum indicator RSI also indicates the same,” said Amit Khare, AVP- Research Commodities, Ganganagar Commodity. He advised traders to make fresh positions in gold and silver.

He suggested buying gold and silver near given support levels at Rs 52,400-52,200 and Rs 61,200-60,800, respectively. He also advised profit booking near resistance levels at Rs 52,650-53,850 and Rs 62,000 and Rs 62,000, respectively.

Global markets

Spot gold was down 0.2% at $1,752.66 per ounce, as of 0016 GMT. US gold futures fell 0.1% to $1,751.80.

Spot silver slipped 1.3% to $21.31, platinum fell 0.4% to $976.28 and palladium declined 0.6% to $1,840.97.

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