Prices of gold futures on the Multi Commodity Exchange of India (MCX) were trading higher on Friday taking cues from their benchmark peers on the US.
At 2:47 pm, gold contract for October delivery was trading at Rs 51,302.00 per 10 grams, up Rs 400.00 or 0.79 per cent from Thursday’s close of Rs 50,902.00. The volumes stood at 5,342 lots while the open interest (OI) was at 15,747 lots, data from MCX showed.
In the spot market in India, however, the opening price for gold of 999 purity was Rs 50,929 per 10 grams, down Rs 293 from Thursday’s closing price of Rs 51,222, while that of 995 purity gold was Rs 50,725, down Rs 292 from Rs 51,017 on Thursday, according to the data published by India Bullion and Jewellers Association (IBJA).
Kedia Commodity Comtrade has advised a ‘BUY’ on the MCX Gold October contract, above Rs 51,240 per 10 grams, with a target of Rs 51,520-51,800, while keeping a stop loss below Rs 51,060.
In global markets, gold prices rebounded nearly 1 per cent on Friday as the dollar retreated and investors latched onto dovish policy signals from US Federal Reserve Chairman Jerome Powell.
Spot gold was up 0.9 per cent at $1,946.55 per ounce by 0650 GMT after declining 1.3 per cent on Thursday. It has gained nearly 0.4 per cent so far in the week after two straight weeks of losses. US gold futures rose 1.1 per cent to $1,954.10.
Powell outlined an approach to setting US monetary policy that pushed up US bond yields. The Fed’s widely-awaited shift in its policy framework, unveiled on Thursday, saw the central bank place more emphasis on boosting economic growth and less on worries about letting inflation run too high. The policy aims for 2 per cent inflation on average so that too low a pace would be followed by an effort to lift inflation “moderately above 2 per cent for some time.”
Gold benefits from lower interest rates, as they decrease the opportunity cost of holding the non-yielding bullion and weigh on the dollar.
– global market input from Reuters
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