Gold Prices Today: Yellow metal to edge higher but hawkish US Fed to limit upside

Gold, Gold Prices

Gold was little changed on Friday in international markets but the metal was on track for a second weekly gain following a retreat in the US dollar from 20 year highs. Spot gold held its ground at $1,848.59 per ounce

as of 0102 GMT. US gold futures were little changed at $1,846.70. For the week so far, bullion is up 0.2 percent.

At 9:42am, gold contracts were up 0.1 percent at Rs 50,920 for 10 gram on the Multi-Commodity Exchange (MCX) while silver gained 0.47 percent at Rs 62,081 a kilogram.

Gold prices recovered from lower levels in the previous session as weaker US GDP data supported the precious metals. US GDP fell 1.5 percent in the first three months of the year. Unemployment claims data improved to 210,000 from 218,000 registered the last week, which capped the gain of precious metals. Some economists assume that aggressive Fed policy may hurt the economy and current economic data indicate that. Precious metals may remain supportive at lower levels in today's session. Gold has support at Rs 50500 and resistance at Rs 51100. Silver has support at Rs 61400 and resistance at Rs 62500, said Nirpendra Yadav, Senior Commodity Research Analyst at Swastika Investmart.

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Gold and silver gained amid downbeat US pending home sales data and weakness in the dollar index. Both the precious metals settled on a positive note in the international markets and settled on a positive note in the domestic markets.

We expect gold and silver to show further strength in the upcoming sessions and gold could test $1870 and silver could test $22.55 per troy ounce levels. Gold has support at $1834-1822 per troy ounce and resistance at $1858-1870 per troy ounce while silver has support at $21.70-21.44 per troy ounce and resistance at $22.20-22.55 per troy ounce.

At MCX, gold has support at Rs 50700-50550 and resistance at Rs 51000-51150 while silver has support at Rs 61400-60900 and resistance at Rs 62000-62440. We suggest buying gold on dips around Rs 50740 with a stop loss of Rs 50580 on a daily closing basis for target of Rs 51100 and silver around Rs 61200 with a stop loss of Rs 60700 on a daily closing basis for target of Rs 62200.

Comex gold trades marginally higher near $1852/oz supported by weakness in US dollar and lower bond yields. The US dollar index has slipped to near one month low amid some disappointing US economic data. Fed minutes reaffirmed that the central bank will continue to raise interest rate but market players are assessing the possibility that Fed may slow down if economic growth gets affected.

ETF flows also show cautious stance of investors. Gold has come off the two week high set earlier this week but is consolidating in a range near $1850/oz and this trend may continue unless there are fresh triggers but tightening expectations may keep pressure on prices.

Gold prices traded firm on Friday with spot gold prices at Comex trading 0.15 percent up near $1854 per ounce in morning trade. The yellow metal got support from weaker dollar and decline in US bond yields despite aggressive Fed stance. Recent surge in oil prices has renewed inflation fears which has led to inflows in gold as a safe haven asset.

We expect gold prices to trade sideways to up for the day with Comex spot gold support at $1840 and resistance at $1870 per ounce. MCX gold June support lies at Rs 50600 and resistance at Rs 51300 per 10 gram.