Gold Prices Today: Inflationary worries, slowdown concerns to support yellow metal despite impending interest rate hike

Abstract: Gold prices may move towards Rs 52700 levels while it has support at Rs 51600. Silver has support at Rs 58000 and resistance at Rs 59800, said Nirpendra Yadav, Senior Commodity Research Analyst at Swastika Investmart.

On Tuesday, gold prices were roughly unchanged in the international markets due to a softening inflation outlook and an impending interest rate hike by top central banks. Spot gold was flat at $1,809.45 per ounce, as of 0305 GMT. US gold futures rose 0.5% to $1,809.90.

At 9.36 am, gold contracts were trading higher by 0.11 percent at Rs 52,180 for 10 grams on the Multi-Commodity Exchange (MCX) while silver added 0.49 percent to Rs 58,774 a kilogram.

A combination of lower bond yields, inflation concerns, and renewed virus concerns in China is supporting the gold price near $1810/oz on the COMEX. Fed and other central banks’ tightening policies, the firmness of the US dollar, and continued ETF outflows are weighing on the price, as well as possible slowdowns in Indian demand due to higher import duties.

“We expect gold prices to trade sideways to down for the day with COMEX Spot gold support at $1800 per ounce and resistance at $1830 per ounce. MCX Gold August support lies at Rs. 51900 and resistance at Rs. 52500 per 10 grams” said Tapan Patel, senior analyst (Commodities), HDFC Securities.

Gold fell sharply in the last few days but has managed to hold near the $1800/oz level which shows some buying interest however a sustained rise is unlikely given the focus on FOMC minutes and US non-farm payrolls data, said Ravindra Rao, VP- Head Commodity Research at Kotak Securities.