were down 0.03% (Rs 14) to Rs 46,624 per 10 grams. On the other hand, silver futures rose 0.69% (Rs 420) to Rs 60,859 per kg.
Gold prices recovered on Tuesday due to feelings of risk related to the crisis in the Chinese real estate market.
Speculation before the US FOMC and uncertainty surrounding China’s Evergrande debt crisis sent mixed signals to the market, boosting gold buying. The dollar index and US bond yields were stable pending the outcome of the US FOMC.
Ravindra Rao, CMT, EPAT, vice president, head of commodities research at Kotak Securities, said gold trades had changed little as market participants sidelined before the decision to the Fed. The mixed activity of the ETF also shows a lack of direction.
Concerns about the virus, the health of the Chinese economy and geopolitical tensions are supporting prices. Gold has come out of lows. A sustained rise can only occur if the Fed fails to meet market expectations. to give a clear timetable for the reduction of obligations, ”he added.
The bullion is seen as a hedge against inflation and currency depreciation resulting from the widespread stimulus. A hawkish move by the Fed would lessen the appeal of gold.
The dollar index hit a nearly a month high, hampering gold’s appeal for holders of other currencies. Higher interest rates increase the opportunity cost of holding non-interest bearing gold.
A decline in domestic prices failed to revive demand for physical gold in India last week, with jewelers betting on the upcoming wedding and party season.
On the spot market, the highest purity gold was sold at Rs 46,513 per 10 grams while silver was priced at Rs 60,200 per kg on Monday, according to the Indian Bullion and Jewelers Association.
The spot price of the yellow metal has fallen by around Rs 1,000 over the past two weeks, while silver has lost around Rs 4,000 over the same period.
Sandeep Matta, Founder of TRADEIT Investment Advisor, said: “Gold posted double-digit gains on yesterday’s trade as investors seek hedge and security amid the volatility of Evergrande that triggered a massive sell-off in the global stock markets.
“We expect gold prices to trade sideways higher for the day with COMEX spot gold support at $ 1,760 and resistance at $ 1,795 an ounce. MCX Gold October is at Rs 46,200 and resistance at Rs 47,000 per 10 grams, “said Tapan Patel, senior analyst (commodities), HDFC Securities.
Spot gold was flat at $ 1,775.63 an ounce at 1:20 am GMT, while US gold futures plunged 0.1% to $ 1,776.30.
Silver climbed 1.2% to $ 22.74 an ounce, while palladium edged up 0.2% to $ 1,910.34. Platinum was stable at $ 954.28. Prices rose 4.7% on Tuesday, its biggest one-day gain since February 10.