NEW DELHI: Gold prices inched abreast of Wednesday, hovering near a four-month high on a weaker dollar, while investors awaited minutes from the US Federal Reserve's last policy meeting as inflation worries persist. However, Indian markets bucked the worldwide trends on the rear of mixed cues.
The US financial institution has pledged to stay interest rates low until the economy reaches financial condition and Fed officials have repeatedly maintained that they expect any rise in inflation to be short-lived. ..
The dollar index held on the brink of a near three-month low against its rivals, making gold less costly for other currency holders. Benchmark US Treasury yields inched higher, increasing the chance cost of holding gold.
Analysts also noted that inflows into gold exchange-traded-funds (ETFs) indicated that investors are buying valuable to hedge against inflation worries. Market watchers said that weakness in dollar is that the key driver for precious metals.
Gold prices in India continued the uptrend on the rear of worldwide cues. However, shops in major states remained locked thanks to restrictions imposed by government , reducing the demand for physical gold within the world's second-largest bullion consumer.
Gold futures on MCX were marginally down by 0.02 per cent or Rs 8 at Rs 48299 per 10 grams. Silver futures were down by 0.72 per cent or Rs 535 to Rs 72,661 per kg.
"COMEX gold trades marginally lower near $1866/oz after a near flat close yesterday. Gold has corrected after testing Feb. highs yesterday as market players positioned for FOMC minutes later today which can give more clarity on Fed’s monetary policy stance," Ravindra Rao, CMT, EPATVP-Head Commodity Research, Kotak Securities.
In the commodity exchange , highest purity gold was sold at Rs 48,419 while silver was priced at Rs 73,168 on Tuesday, consistent with the Indian Bullion and Jewellers
"Gold ETF investors also moved to the sidelines. However, supporting price is Middle-east tensions and mixed economic data from major economies. Gold may remain sideways to lower as Fed's dovish stance is essentially anticipated."
Trading strategy
"We expect gold prices to trade sideways to up for the day with COMEX gold support at $1850 and resistance at $1876/$1890 per ounce. MCX Gold June futures support lies at Rs. 48000 and resistance at Rs. 48700 per 10 gram," Tapan Patel, Senior Analyst (Commodities), HDFC Securities.
Global markets
Spot gold was up 0.1 per cent at $1,870 per ounce by 0044 GMT, after hitting its highest since Jan. 29 at $1,874.80 within the previous session. US gold futures rose 0.1 per cent to $1,869.60 per ounce,
Palladium gained 0.2 per cent to $2,907.09 per ounce, silver eased 0.2 per cent to $28.15, while platinum edged 0.2 per cent higher to $1,220.50.