Today Gold Rate in India rose little, reflecting rising global rates. December gold futures on the MCX were up 0.38 per cent, hovering near six-month lows of Rs. 45,942 per gramme, while silver rates were up 0.18 per cent to Rs. 58,490 per kg. Gold fell 0.4 per cent in the previous session, while silver fell 3.5 per cent or 2,000 per kg.
Gold prices in global markets edged higher but remained near a seven-week low, weighed down by a strong US dollar.
Fears that the Fed may begin to reduce its stimulus measures pushed the dollar higher, reducing gold’s attraction to foreign currency purchasers, according to Vidit Garg, director of MyGoldKart.
“Gold must break through $1756 to resume the uptrend, otherwise this uptrend will be seen as a bearish. Bearish correction if gold breaks through $1730 then during the day we could see the yellow metal drop to $1717-$1722.
Technically December MCX contract has resistance around 46350, above which it could support at 46600 while a failure to break it could force the metal to hit new monthly lows around 45500,” he added.
President Mary Daly of the San Francisco Federal Reserve Bank said on Wednesday that the US central bank will be able to begin cutting asset purchases by the end of the year, but that an interest rate hike is still a “long way” away.
Gold has long been thought of as an inflation hedge, but diminished central bank stimulus and interest rate hikes tend to raise government bond yields, resulting in a greater opportunity cost for gold, which pays no interest.
Silver increased by 0.3 per cent to $21.58 per ounce, while platinum increased by 0.4 per cent to $954.08. Gold futures were up 0.2 per cent at $1,729.83 per ounce, recovering from a seven-week low of $1,720.49 on Wednesday.
The dollar index fell somewhat Thursday, but it remained close to a year’s high reached on Wednesday, boosting the price of gold for buyers in other currencies.
At 94.278, the dollar index was marginally lower. Meanwhile, 10-year Treasury yields fell a smidgeon but remained above 1.5 per cent, a level not seen since late June, offering risk to gold. The cost of owning non-interest bearing bullion falls when interest rates fall.
