Domestic gold and silver prices rose marginally on Wednesday tracking global benchmarks amid a weakening dollar. Depreciation in the greenback makes precious metals more attractive for holders of other currencies. Sharp gains in the domestic equity market, with benchmarks hitting new highs, limited the upside in bullion.
At 1:50 pm, the December contract of gold futures on MCX was at Rs 47276.00 per 10 grams, up by Rs 78 or 0.2 percent compared with its previous close. Silver also rose, with the December contract up by Rs 444 or 0.7 percent at Rs 62,030 per kilogram.
Globally, gold and silver moved higher as investors awaited US inflation data to assess the US central bank's path on policy normalisation.
Spot gold rose 0.4 percent to 1,768.1 per ounce. US gold futures were up 0.5 percent at $1,768.6 per ounce. Silver was up 1.3 percent at $22.9 per ounce.
The dollar index -- which measures the greenback against six other currencies -- declined 0.2 percent to 94.8, easing a day after hitting a more than one-year high.
Back home, the rupee gained by 26 paise to 75.26 against the dollar, supported by strong macroeconomic data. Lower crude oil rates also supported the currency.
Gold is seen as a hedge against inflation and currency debasement likely from the widespread stimulus. The tapering of stimulus by the US central bank could tackle both those conditions, diminishing bullion’s appeal.
On Dalal Street, benchmark indices Sensex and Nifty50 roared to all-time highs led y strong buying interest in automobile, metal and consumer durable shares. Catch LIVE Updates here
What analysts say
Manoj Kumar Jain, Director, Head-Commodity and Currency Research at Prithvi Finmart, expects more upside in both precious metals due to rising inflation.
He sees support for MCX gold at Rs 47,000-46,770 and resistance at Rs 47,440-47,650. For silver, he sees support at Rs 61,200-60,900 and resistance at Rs 61,900-62,400.
He recommends buying gold around Rs 47,050 for a target of Rs 47,440 with a stop loss at Rs 46,820, and silver around Rs 61,330 for a target of Rs 62,200 with a stop loss at Rs 60,900.
(Edited by : Sandeep Singh)
First Published: IST