Gold prices inched up on Tuesday in the international markets, as the dollar eased off a 20-year high, offsetting pressure from expectations of the US Federal Reserve keeping interest rates higher for longer to combat inflation.
Spot gold ticked 0.1 percent higher to $1,739.14 per ounce, as of 0058 GMT. Prices hit a one-month low of $1,719.56 on Monday, following Fed Chair Jerome Powell's hawkish remarks at Jackson Hole symposium on Friday.
At 9.38am, gold contracts were trading 0.29 percent lower on the Multi-Commodity Exchange (MCX) at Rs 51,101 per 10 grams and silver shed 0.7 percent at Rs 53,949 a kilogram.
Nirpendra Yadav, Senior Commodity Research Analyst at Swastika Investmart
Precious metals remained weak due to a hawkish comment from Fed chair Jerome Powell. The US dollar, which moves opposite to gold prices trading near 109 levels while US benchmark Treasury yield also gained 2.53 percent yesterday making less attractive nonyielding precious metals. Today, the US consumer confidence data will be the key trigger for bullion, which might further pressure prices at higher levels. On the MCX, gold has resistance at Rs 51,500 and support at Rs 50,800. Silver December contract has resistance at Rs 56,000 and support at Rs 54,400.
Tapan Patel, Senior Analyst (Commodities), HDFC Securities.
Gold prices traded firm on Tuesday with spot gold prices at COMEX were trading marginal up near $1739 per ounce in the morning trade. Gold prices were supported by dollar weakness which retreated from 20 year highs. Gold prices may cap upside on hawkish Fed to tackle inflation.
We expect gold prices to trade sideways to down for the day with COMEX Spot gold support at $1720 and resistance at $1760 per ounce. MCX Gold October support lies at Rs 50900 and resistance at Rs 51500 per 10 grams.
Pritam Patnaik, Head - Commodities, HNI and NRI Acquisitions, Axis Securities
Profit booking in the greenback led to a brief rally in gold in yesterday’s day of trade. The US dollar retreated against the euro, as the ECB indicated that it will continue with more aggressive rate hikes, than initially thought. The prospects for gold don’t look too bright as an extremely hawkish Fed is going to go ahead with its aggressive rate hike plans, with an aim to bring inflation close to 2%, which is still a long way off. They seem to have sacrificed economic growth for inflation control, which says a lot about their resolve.
Despite weakness witnessed in stock and currency markets, gold has seen limited inflows as a safe haven. But, this could change, if the economic outlook worsens, providing some support to prices. Considering the future hike will be data driven, all positive data points will lead to higher probability of a hike and put pressure on bullion. Sell on rise.Disclaimer: The views and investment tips expressed by experts on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.