Gold and silver rates today edged up in Indian markets, tracking higher global rates in precious metals. On MCX, gold futures rose 0.32% to ₹51,000 per 10 gram while silver jumped 0.33% to ₹61,609 per kg. In global markets, gold edged higher to near $1,850 levels, boosted by a pullback in US dollar though higher US Treasury yields capped gains. A weaker dollar makes bullion more attractive for overseas buyers. The dollar index has recently pulled back as investors bet that easing lockdowns in China can aid global growth.
Among other precious metal prices, spot silver gained 0.4% to $21.84 per ounce while platinum rose 0.3% to $958.
Bullion, seen as a safe store of value during times of economic crises, tends to become less attractive to investors when U.S. interest rates are raised because it yields no interest.
The recent pullback in gold prices aided inflows into gold-backed exchange traded funds or ETFs. The holdings of SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, rose 0.69% to 1,063.43 tonnes on Friday from 1,056.18 tonnes on Thursday.
“Gold may test $1850 to $1855 levels and silver may test $22.20 to $22.50 levels. On mcx we are recommending buy in gold at ₹50,200 to ₹50,300 levels with the stop loss of 49,940 levels for the target of ₹50,800 levels,” said Anuj Gupta, Vice President — Research at IIFL Securities.
After hitting ₹55,500 in March, gold has struggled amid a stronger dollar and firm US bond yields.
In a recent note on its quarterly outlook for gold Kotak Securities said: “Gold saw a good start to the year 2022 but seems to be losing momentum now. It is likely to be a bitter sweet year for gold owing to mixed factors and volatility is here to stay. On the positive side, geopolitical tensions have added a new uncertainty to global economic outlook and further aggravated the inflation situation increasing the demand to stay invested in the metal. ETF inflows show renewed investor interest however buying has been very price sensitive.”
“Overall, we expect gold to remain volatile and trade in a broad range however buying on dips could be the ideal strategy. With equity markets losing momentum, gold may benefit from increased demand as an alternative asset. Currently we are seeing an exodus from both equities and commodities on prospect of higher borrowing costs however equities still have room to correct after the rally in last few years. Outlook for US dollar remains strong however even a small correction may be enough to support gold and other commodities. Gold may trade in a range of $1700-2010/oz level. MCX Gold may trade in a range of Rs.47000-55000/10 grams and buying could be considered at lower levels,” the brokerage added. (With Agency Inputs)
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