Gold rate today: Yellow metal moves higher; silver slips below Rs 65,000

NEW DELHI: Gold prices were trading little higher on Monday, as investors awaited the US Federal Reserve’s outcome, scheduled later in the week. Meanwhile, concerns over inflation and Russia-Ukraine tensions kept bullion’s safe-haven allure intact.

Traders will seek confirmation on the interest rate hike path of the US central bank.

Gold futures on MCX were up 0.11 per cent or Rs 53 at Rs 48,302 per 10 grams. Silver futures declined by 0.31 per cent or Rs 201 to Rs 64,605 per kg.

Ravindra Rao, CMT, EPAT, VP- Head Commodity Research at Kotak Securities said that gold trades higher supported by geopolitical tensions relating to Russia, increasing inflation concerns, rising virus cases, sell-off in equities and pick up in ETF buying.

“However, higher bond yields and increased expectations of Fed’s monetary tightening, weighed on the bullion. Some correction is possible in gold amid positioning ahead of the Fed’s monetary policy meeting,” he added.

Gold is generally seen as an inflationary hedge, but it is highly sensitive to rising US interest rates, which increases the opportunity cost of holding non-interest bearing bullion.

“Gold prices’ downside looks capped in India because of some relief from rupee depreciation. The Fed is the key factor to determine gold price trends as Covid worries are diminishing,” said Ravi Singh, VP and Head of Research, ShareIndia.

Gold was sold at a discount in India last week, as a rise in domestic prices dulled demand and jewellers looked ahead to the country’s annual budget, while the upcoming Lunar New Year spurred demand in other key Asian centres.

In the spot market, the highest purity gold was sold at Rs 48,608 per 10 grams while silver was priced at Rs 64,941 per kg on Thursday, according to the Indian Bullion and Jewellers Association.

The spot prices of gold have gained over Rs 1,230 in the last couple of weeks, whereas silver has jumped more than Rs 5,000 per kg during the period under review.

Trading strategy
Gold prices traded under pressure after the Fed announced hikes in key interest rates by 2023. We expect gold to remain bullish this week, Singh added. He advised to buy gold near Rs 48,000 for the target of Rs 48,300 and sell below Rs 47,800 for the target of Rs 47,600.

Global markets
Spot gold was flat at $1,833.36 per ounce by 0034 GMT. US gold futures were up 0.2 per cent to $1,834.70.

Spot silver was flat at $24.23 an ounce. Palladium fell 0.3 per cent to $2,101.56 and platinum was up 0.2 per cent to $1,031.43.