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NEW DELHI: Gold prices in India bucked the global trend and were trading higher amid a hike in import duty and support from weakening treasury yields. However, a firm US dollar capped yellow metal's appeal.
The dollar hovered close to recent two-decade highs, continuing to make gold less attractive for buyers holding other currencies.
Gold futures on MCX were trading higher, up 0.36 per cent or Rs 187 at Rs 52,104 per 10 grams. Silver futures were up by 0.43 per cent or Rs 250 at Rs 58,425 per kg.
Gold is seen as an inflation hedge, higher short-term US interest rates and bond yields raise the opportunity cost of holding bullion, which yields no interest. A firm US dollar makes gold less attractive for buyers holding other currencies.
Pritam Patnaik, Head - Commodities, Axis Securities said gold prices remained subdued even after posting three weeks of down trend; respite seems elusive.
Despite the fact that recession fears escalated on Friday after the US ISM Manufacturing, PMI slumped to two-year lows, he added. "Adding to the risk-off mood was further geopolitical tension between Russia and Ukraine and China’s failure to provide butting support."
India has raised its basic import duty on gold to 12.5 per cent from 7.5 per cent, the government said on Friday, as the world's second-biggest consumer of precious metal tries to dampen demand and bring down the trade deficit.
Physical gold dealers in India offered steep discounts last week as demand remained weak, with the import tax hike likely to further sap interest, while top consumer China saw activity bounce back slowly as it emerged from COVID-led curbs.
In the spot market, the highest purity gold was sold at Rs 51,791 per 10 grams while silver was priced at Rs 57,773 per kg on Friday, according to the Indian Bullion and Jewellers Association.
The spot prices of gold have gained about Rs 1,000 in the last one week, whereas silver has plunged more than 3,800 per kg in the last weeks.
Rahul Kalantri, VP Commodities, Mehta Equities said gold and silver prices witnessed high volatility last week after the US, UK, and European central bank chiefs indicated more policy action to combat inflation.
In the domestic market, gold prices surged on Friday after a surprise duty hike by the government of India on gold to curb imports and support the rupee, he added.
Trading Strategy
"We expect gold prices to trade sideways to down for the day with COMEX Spot gold support at $1,790 and resistance at $1,820 per ounce. MCX Gold August support lies at Rs 51,600 and resistance at Rs 52,100 per 10 grams," said Tapan Patel, Senior Analyst (Commodities), HDFC Securities.
Global markets
Spot gold was down 0.2 per cent at $1,807.19 per ounce after hitting a five-month low of $1,783.50 on Friday. US gold futures rose 0.5 per cent to $1,809.50.
Spot silver eased 0.2 per cent to $19.82 per ounce, platinum fell 0.5 per cent to $884.39, and palladium dropped 0.6 per cent to $1,948.50.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)
The dollar hovered close to recent two-decade highs, continuing to make gold less attractive for buyers holding other currencies.
Gold futures on MCX were trading higher, up 0.36 per cent or Rs 187 at Rs 52,104 per 10 grams. Silver futures were up by 0.43 per cent or Rs 250 at Rs 58,425 per kg.
Gold is seen as an inflation hedge, higher short-term US interest rates and bond yields raise the opportunity cost of holding bullion, which yields no interest. A firm US dollar makes gold less attractive for buyers holding other currencies.
Pritam Patnaik, Head - Commodities, Axis Securities said gold prices remained subdued even after posting three weeks of down trend; respite seems elusive.
Despite the fact that recession fears escalated on Friday after the US ISM Manufacturing, PMI slumped to two-year lows, he added. "Adding to the risk-off mood was further geopolitical tension between Russia and Ukraine and China’s failure to provide butting support."
India has raised its basic import duty on gold to 12.5 per cent from 7.5 per cent, the government said on Friday, as the world's second-biggest consumer of precious metal tries to dampen demand and bring down the trade deficit.
Physical gold dealers in India offered steep discounts last week as demand remained weak, with the import tax hike likely to further sap interest, while top consumer China saw activity bounce back slowly as it emerged from COVID-led curbs.
In the spot market, the highest purity gold was sold at Rs 51,791 per 10 grams while silver was priced at Rs 57,773 per kg on Friday, according to the Indian Bullion and Jewellers Association.
The spot prices of gold have gained about Rs 1,000 in the last one week, whereas silver has plunged more than 3,800 per kg in the last weeks.
Rahul Kalantri, VP Commodities, Mehta Equities said gold and silver prices witnessed high volatility last week after the US, UK, and European central bank chiefs indicated more policy action to combat inflation.
In the domestic market, gold prices surged on Friday after a surprise duty hike by the government of India on gold to curb imports and support the rupee, he added.
Trading Strategy
"We expect gold prices to trade sideways to down for the day with COMEX Spot gold support at $1,790 and resistance at $1,820 per ounce. MCX Gold August support lies at Rs 51,600 and resistance at Rs 52,100 per 10 grams," said Tapan Patel, Senior Analyst (Commodities), HDFC Securities.
Global markets
Spot gold was down 0.2 per cent at $1,807.19 per ounce after hitting a five-month low of $1,783.50 on Friday. US gold futures rose 0.5 per cent to $1,809.50.
Spot silver eased 0.2 per cent to $19.82 per ounce, platinum fell 0.5 per cent to $884.39, and palladium dropped 0.6 per cent to $1,948.50.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)
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(What's moving Sensex and Nifty Track latest market news, stock tips and expert advice, on ETMarkets. Also, ETMarkets.com is now on Telegram. For fastest news alerts on financial markets, investment strategies and stocks alerts, subscribe to our Telegram feeds .)
...moreDownload The Economic Times News App to get Daily Market Updates & Live Business News.
Subscribe to The Economic Times Prime and read the Economic Times ePaper Online.and Sensex Today.
Top Trending Stocks: SBI Share Price, Axis Bank Share Price, HDFC Bank Share Price, Infosys Share Price, Wipro Share Price, NTPC Share Price
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