Yellow metal to trade lower ahead of UK interest rate decision

Gold prices traded in a tight range on Wednesday in international markets, pressured by a stronger dollar and Treasury yields as hawkish comments from U.S. Federal Reserve officials pulled the metal further away from last session’s one-month peak. But the yellow metal prices were steady on Thursday, supported by a pullback in the U.S. Treasury yields and as cautious investors awaited a key U.S. non-farm payrolls report due this week that could offer more cues on the Federal Reserve’s rate-hike stance.

On Thursday morning, gold contracts were trading 0.28 percent lower on the Multi-Commodity Exchange (MCX) at Rs 51,550 for 10 grams and silver advanced 0.4 percent at Rs 57,787 a kilogram. Spot gold raised 0.1 percent to $1,761.76 per ounce, seesawing in a roughly $20 range, while US gold futures fell 0.7 percent to $1,776.4.

COMEX gold trades marginally higher near $1785 per ounce amid rough in U.S. dollar and bond yields as market players assess U.S. economic numbers and central bank comments to determine future moves. Market players are also positioning for the Bank of England interest rate decision as the central bank is expected to hasten rate hikes to control inflation, said, Ravindra Rao, VP- Head Commodity Research at Kotak Securities.

Tapan Patel, Senior Analyst (Commodities), HDFC Securities, said, “The weaker dollar and recession worries have kept gold prices in a firm range with lower volatility. We expect gold prices to trade sideways to up for the day with COMEX spot gold support at $1750 and resistance at $1785 per ounce. MCX gold October support lies at Rs 51,100 and resistance at Rs 51,600 per 10 grams.”

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