Domestic gold and silver prices rose on Friday tracking global benchmarks amid a weakening dollar, as investors assessed how the US central bank may respond to inflationary pressure after its Chairman said higher prices could last longer than expected. Cautious gains in domestic equities however dented the appeal of bullion as a safety bet.
At 1:44 pm, Multi Commodity Exchange gold futures for the month of December quoted at Rs 47,999 per 10 grams, up by Rs 202 or 0.4 percent from their previous close. The December contract of silver was at Rs 66,130 per kilogram, up by Rs 474 or 0.7 percent from its previous close.
Globally, the yellow metal hovered close to the key $1,800 level, supported by a depreciating dollar.
Spot gold was last seen trading half a percent higher at $1,801.5 per ounce. US gold futures were up 0.4 percent at $1,802.9 per ounce. Silver was up 0.9 percent at $24.5 per ounce.
Gold is often considered a hedge against inflation, though reduced stimulus and interest rate hikes push government bond yields up, denting the bullion’s appeal.
Back home, the rupee depreciated by 14 paise to 75.04 against the US dollar, weighed down by soaring crude oil prices.
The dollar index - which measures the greenback against six other currencies - was down 0.1 percent at 93.53 at the last count, after registering two back-to-back weekly losses. Weakness in the greenback makes the precious metals more attractive for holders of other currencies.
On Dalal Street, benchmark indices Sensex and Nifty50 recovered intraday losses to move higher led by financial stocks, though losses in automobile, IT and consumer shares limited the upside. Catch latest market updates here
Typically, gains in equities dent the safe-haven appeal of bullion and vice versa.
Should you take positions now?
Gold and silver are expected to rise further this week with any dip providing investors with a fresh opportunity to accumulate the precious metals, said Manoj Kumar Jain, Director-Head of Commodity Research at Prithvi Finmart.
He sees support for MCX gold futures at Rs 47,600-47,440 and resistance at Rs 48,050-48,260. For silver, he sees support at Rs 65,220-64,700 and resistance at Rs 66,100-66,600.
Jain suggests buying gold around Rs 47,660 for a target of Rs 48,100 with a stop loss at Rs 47,440, and silver around Rs 65,200 for a target of Rs 66,100 with a stop loss at Rs 64,700.
Gold futures can be bought around Rs 47,900 for a target of Rs 48,200 in the near term, said Ravi Singh, Vice President and Head of Research at ShareIndia.
(Edited by : Sandeep Singh)