US consumer prices rose moderately in January as higher gasoline prices were blunted by a slump in airline fares amid a relentless pandemic, tempering expectations for a sustained acceleration in inflation this year. Gold is considered a hedge against inflation.
Gold futures on MCX were down 0.33 per cent or Rs 160 at Rs 47,853 per 10 grams. Silver futures dipped 0.88 per cent or Rs 608 to Rs 68,318 per kg.
“Pause in the US dollar’s decline has put some pressure on gold. Also weighing on price is weaker investor interest and improvement in the virus situation. However, supporting price is Fed’s cautious tone on the US economy and hopes of additional US stimulus. Gold may witness choppy trade amid lack of fresh cues however there is a possibility of correction if the US dollar manages to recover,” said Ravindra Rao, VP- Head Commodity Research at Kotak Securities.
In the spot market, gold prices fell marginally by Rs 38 to Rs 47,576 per 10 grams in the national capital on Wednesday as rupee appreciation capped the price of the precious metal. In tandem, silver prices tumbled Rs 783 to Rs 68,884 per kg.
“The yellow metal was trading marginally down on a stronger dollar. We expect gold prices to trade sideways to up for the day. MCX Gold April futures have key support at Rs. 47,800 and resistance at Rs.48,200 per 10 gram,” said Tapan Patel, Senior Analyst (Commodities), HDFC Securities.
Gold inched lower on Thursday as weaker US inflation data diminished bullion’s appeal, although a softer dollar and lower Treasury yields kept the losses in check.
Spot gold fell 0.1 per cent to $1,839.61 per ounce by 0055 GMT. Prices scaled their highest in more than a week in the previous session. US gold futures slipped 0.1 per cent to $1,841.50.
Platinum fell 1.2 per cent to $1,227.08 an ounce, having hit its highest since February 2015 at $1,250 on Wednesday as hopes firmed that an economic recovery would boost auto sales.
Spot silver shed 0.4 per cent to $26.89 and palladium eased 0.2 per cent to $2,351.24.