Gold prices moved higher on Friday as investors awaited Fed chief Jerome Powell’s speech at the Jackson Hole symposium after some US central bank officials called for paring bond purchases.
Gold futures on MCX were up 0.36 per cent, or Rs 168, at Rs 47,405 per 10 gram. Silver futures jumped 0.31 per cent, or Rs 197, at Rs 62,920 per kg.
The yellow metal has traded volatile ahead of Fed chairman’s speech at Jackson Hole Symposium later in the evening. The slower economic recovery and surge in virus cases may support gold prices to trade firm for the day.
Due to Islamic State’s genocide bomb attack on Thursday at Kabul airport, that killed scores of civilians and at least 13 US troops and so Markets turned very cautious.
The dollar index inched higher, weighing on the greenback-denominated bullion. Lower interest rates decrease the opportunity cost of holding non-yielding gold.
According to Avindra Rao, CMT, EPAT, VP – Head Commodity Research at Kotak Securities, said gold trades are supported by safe haven buying amid increasing tensions relating to Afghanistan following attacks at Kabul airport. Mixed economic data from major economies and rising virus cases has also lent support.
“However, weighing on gold price is recovery in US dollar amid some hawkish Fed comments, weaker investor interest and drop in China’s gold imports. Gold may continue to trade firm amid risk aversion in the market and a fall may come only if the Fed Chairman sounds too hawkish,” he added.
Gold jewellery varies in price across India, the second-largest consumer of the metal, due to excise duty, state taxes, and making charges.
In the spot market, highest purity gold was sold at Rs 47,350 per 10 gram while silver was priced at Rs 63,230 per kg on Tuesday, according to the Indian Bullion and Jewelers Association.
The price of the yellow metal in the spot market has remained flat in the last one week, whereas silver has remained almost unchanged during the period.
Trading strategy
“We expect gold prices to trade sideways to up for the day with COMEX Spot gold support at $1,780 and resistance at $1,810 per ounce. MCX Gold October support lies at Rs 46,900 and resistance at Rs 47,500 per 10 gram,” said Tapan Patel, Senior Analyst (Commodities), HDFC Securities.
