Gold futures on MCX were up 0.21 per cent, or Rs 94, at Rs 46,900 per 10 gram. On the other hand, silver futures declined 0.31 per cent, or Rs 194, at Rs 63,398 per kg.
Gold was under pressure, following stronger dollar and rise in US producers prices. The higher inflation has raised market expectations of Fed tapering as inflation is outpacing US economic growth.
The dollar was buoyed by cautious risk sentiment, denting the bullion’s appeal for those holding other currencies. Non-yielding gold tends to gain in a low interest rate environment.
Ravindra Rao, CMT, EPAT, VP- Head Commodity Research at Kotak Securities, said gold prices were under pressure due to the firm US dollar amid persisting debate about Fed’s monetary tightening and weaker investor interest as is evident from ETF outflows.
“However, supporting price is geopolitical tensions, rising inflation, US-China tensions, China’s regulatory measures and persisting virus risks. Gold has come off the highs and may remain pressurized by Fed’s tightening concerns,” he added.
In the spot market, highest purity gold was sold at Rs 47,203 per 10 gram while silver was priced at Rs 64,449 per kg on Tuesday, according to the Indian Bullion and Jewellers Association.
The spot price of the yellow metal has remained flat marginally in the last couple of weeks, whereas silver gained more than Rs 1,100 per kg during the same period.
“We expect gold prices to trade sideways to down for the day with COMEX Spot gold support at $1,775 and resistance at $1,803 per ounce. MCX Gold October support lies at Rs 46,500 and resistance at Rs 47,100 per 10 gram,” said Tapan Patel, Senior Analyst (Commodities), HDFC Securities.
Spot gold rose 0.2% to $1,791.01 per ounce by 0318 GMT, after posting a weekly decline of 2.1%. US gold futures were flat at $1,791.90. Silver was steady at $23.71.
Platinum rose 0.1% to $956.70 per ounce and touched its lowest level since November 2020. Palladium hit its lowest level since August 2020, but recovered some lost ground to trade up 0.3% at $2,144.98.