Besides, pick-up in buying by local jewellers to meet the ongoing wedding season demand at domestic spot market supported the uptrend in gold.
A list of important headlines from across news agencies that could help in your trade today.
"Economic theory suggests that larger budget deficits lead to higher inflation as more Government spending (if this spending is not directed towards the creation of productive assets) leads to an increase in the overall price level," says Saurabh Mukherjea is the CEO of Ambit Capital.
A moderation in Chinese inflation would support the view that the world's second-largest economy is slowly starting to lose momentum after forecast-beating growth of 6.9 percent in 2017.
The MCLR for 1-year tenure loan for SBI is at 7.95 percent in January 2018 while its base rate still stands at 8.65 percent.
The central bank has cut GVA guidance for FY18 to 6.6 percent from 6.7 percent earlier and for FY19 the guidance has been cut to 7.2 percent from 7.4 percent
The RBI MPC is likely to continue slightly hawkish pause. "We continue to expect the RBI to persist with its slightly hawkish pause in its policy, on the side of caution. Inflation is likely peaking off to 5 percent in January from 5.2 percent in December with the vegetable price spike is expectedly reversing," BofAML said in a report.
The MPC will be wary of the inflation trajectory over the next six months. India’s CPI inflation is due to increase to around 6 percent by June 2018 and from thereon glide down to around 4.5 percent by March 2019. However, the monetary policy will decidedly be on the hawkish side with very little downside visible in the inflation trajectory.
A majority of economists also expect the central bank's tone to turn hawkish when it announces its latest policy decision on Wednesday.
Finance Minister Arun Jaitley, in conversation with Network 18's Rahul Joshi, spoke about various schemes announced in the Budget 2018 including tax on long-term capital gains (LTCG).
According to majority of economists, RBI may start hinting about rate hike in forthcoming policies given likely tightening interest rate cycle globally.
Abe rebuffed the view the Bank of Japan's 2 percent inflation target was too ambitious for a country mired in two decades of deflation, saying the central bank's commitment and actions to hit the target had helped revive the economy.
The government has revised its 2018-19 fiscal deficit projections to 3.3 per cent of GDP and for the current fiscal to 3.5 per cent of GDP, against original targets of 3 per cent and 3.2 per cent, respectively.
The incremental credit in the current financial year (till January 5) stood at Rs 2.02 lakh crore, far outpacing the additional deposits of Rs 1.27 lakh crore.
Even as the headline inflation climbed to 5.2 per cent in December, it is within the range of 2-6 per cent, set for the central bank as per the inflation targeting framework, analysts at Bank of America Merill Lynch said in a note.
Economists project the Bank of Japan will keep its short-term interest rate at minus 0.1 percent and the 10-year government bond yield target at around zero percent next week, the poll showed.
"As the inflation numbers are being driven largely on account of supply side factors, we urge the Reserve Bank of India to calibrate its monetary policy stance giving equal weightage to growth consideration.
After November's 15-month high of 4.88 percent, consumer price inflation likely climbed to 5.10 percent, which would the highest since July 2016, according to the median in the poll of nearly 40 economists over the past week.
Several policymakers are encouraging the U.S. central bank to review its method for controlling inflation and consider a system that makes up for weak inflation in one year by allowing prices to rise more quickly in future years so that the overall level, over time, stays on a set path.
The producer price index (PPI) rose 4.9 percent in December from a year earlier, compared with 5.8 percent in November, the National Bureau of Statistics (NBS) said on Wednesday.
The details of the meeting, at which the Fed raised interest rates for the fifth time since the 2008 financial crisis, also showed that officials have a similar lack of certainty over the impact of fiscal stimulus on raising price pressures.
"The year-on-year inflation measured by monthly CPI-IW (Consumer Price Index-Industrial Workers) stood at 3.97 per cent for November, 2017 as compared to 3.24 per cent for the previous month (October, 2017) and 2.59 per cent during the corresponding month (November 2016) of the previous year," the labour ministry said in a statement.
Yields on 10-year government bonds were around 6.90 percent pre-demonetisation; they have now climbed to 7.20 percent. Many factors are behind the yields to touch an 18 month high
The central bank's monetary policy committee (MPC) voted 5-1 on Dec. 6 to keep the policy rate on hold at 6 percent after inflation accelerated to a seven-month high.
According to the Japanese financial services major, strengthening of the growth recovery could push a few Monetary Policy Committee (MPC) members towards a "tightening bias".