Bullion Trading at Premium on Inflation Fears | Neal Bhai

Bullion Trading: Gold rose for a second day as the U.S. dollar extended declines, with investors waiting for comments from Federal Reserve officials this week which could provide insight into the prospects of tighter monetary policy.

Bullion has fluctuated recently as markets assess the possibility of earlier-than-expected tightening to contain inflationary pressures. Upcoming speeches and discussions by officials including Randal Quarles, Mary Daly and Chair Jerome Powell could provide more clues, after Governor Christopher Waller said Tuesday the Fed should begin tapering its bond-buying program next month, though interest-rate increases are probably “still some time off.” 

Gold Price In India: Gold futures continued to trade higher on Wednesday, October 20. On the Multi Commodity Exchange (MCX), gold futures due for a December 3 delivery, were last seen trading higher by 0.41 per cent – at ₹ 47,477, compared to the previous close of ₹ 47,280. Silver futures due for a December 3 delivery were last up 0.51 per cent at ₹ 64,784 against a previous close of ₹ 64,450.

Domestic spot gold with purity of 24 carats opened at ₹ 47,546 per 10 grams on Wednesday, and silver at ₹ 64,422 per kilogram – both rates excluding GST (goods and services tax), according to Mumbai-based industry body India Bullion and Jewellers Association (IBJA).

Foreign Exchange Rates:

On the global front, gold prices, however, edged lower as the metal’s shine was dented by surging U.S. bond yields. Spot gold fell 0.1 per cent to $1,767.71 per ounce and U.S. gold futures dropped 0.1 per cent to $1,768.40. The U.S. dollar index, which gauges the greenback’s strength against a basket of six currencies, slipped 0.06 per cent to 93.67.

Analysts Outlook:

Ravi Singh, Vice President and Head of Research, Share India: “Gold MCX traded in a range bound zone yesterday taking cues from global market. However, the volatility was higher due to the movement in U.S. dollar. We expect gold to trade sideways to up in the coming week. In MCX, gold has a support at ₹ 46,900 and resistance at ₹ 47,650.”

He added, “Buy Zone above – ₹ 47,300 for the target of ₹ 47, 650; Sell Zone below – ₹ 46,900 for the target of ₹ 46,600.”

Amit khare, AVP – Research Commodities, Ganganagar Commodity Ltd: “Yesterday we saw some safe haven buying in bullions at lower levels, especially in silver. Overall technical charts of gold and silver are strong. Momentum indicator RSI also citing the same, which means more upside potential for the bullion market. So, traders are advised to make fresh long positions in gold and silver in small dips, traders should focus important technical levels given below for the day: December Gold closing price ₹ 47,280, Support 1 – ₹ 47,150, Support 2 – ₹ 47,000, Resistance 1 – ₹ 47,400, Resistance 2 – ₹ 47,650. December Silver closing price ₹ 64,450, Support 1 – ₹ 63,500, Support 2 – ₹ 62,600, Resistance 1 – ₹ 65,000, Resistance 2 – ₹ 65,500.”

Bullion Trading at Premium on Inflation Fears | Neal Bhai via @goldsilverrepor
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