US retail sales rebounded sharply in January and manufacturing activity rose, while US producer prices increased by the most since 2009, suggesting inflation was starting to creep up. Gold is often viewed as a hedge against inflation.
Gold futures on MCX were up 0.40 per cent or Rs 187 at Rs 46,424 per 10 grams. Silver futures added 0.42 per cent or Rs 293 to Rs 69,524 per kg.
“Gold prices halted a five day decline on Wednesday with spot gold price at COMEX was trading up by 0.40 per cent in the morning trade at $1,784 per ounce. The yellow metal was trading under pressure on economic recovery optimism with positive US retail sales data and dollar recovery. The rise in bond yields also weighed on gold prices,” said Tapan Patel, Senior Analyst (Commodities), HDFC Securities.
In the spot market, Gold in the national capital plunged Rs 717 to Rs 46,102 per 10 gram on Wednesday in line with decline in global precious metal prices. Silver also declined Rs 1,274 to Rs 68,239 per kg.
“We expect gold prices to trade sideways to down as prices need to trade above $1,800 to resume the uptrend while support lies at $1,760 per ounce. MCX Gold April futures support lies at Rs 45,900 per 10 gram while resistance at Rs 46,700 per 10 gram,” said Patel.
Gold prices inched up on Thursday, recovering from a more than two-month low hit in the previous session as US Treasury yields retreated, although a stronger dollar kept bullion’s gains in check.
Spot gold was up 0.1 per cent at $1,777.06 per ounce by 0012 GMT, having dropped to its lowest since Nov. 30 at $1,768.60 on Wednesday. US gold futures rose 0.3 per cent to $1,777.40.
Silver eased 0.1 per cent to $27.33 an ounce. Platinum gained 1.4 per cent to $1,271.15 and palladium added 0.2 per cent to $2,376.76.