Kolkata: Escalation of tension between US and China and a weak dollar supported gold and silver prices on Tuesday.
Gold futures for October on Multi Commodity Exchange (MCX) opened higher at Rs 53,415 per 10 gm compared to Monday’s closing of Rs 53,275 per 10 gm. They remained firm in the afternoon at Rs 53,815. Silver opened at Rs 69,445 per kg on MCX for September contract. Silver futures closed on Monday at Rs 69,155 per kg. Silver futures touched a price of Rs 70,600 per kg at around 12.30 pm, a gain of Rs 1,155 per kg from Tuesday’s opening prices.
“Apart from other factors, a weak dollar is pushing up prices of both gold and silver. Dollar is lowest since August 6,” said Hareesh V, head of commodity research at Geojit Financial.
In the domestic spot market, gold was trading at Rs 54,111 per 10 gm, a rise of 2.33% in comparison to Monday. Silver also appreciated by 2.1% in the spot market and was trading at Rs 69,496 per kg. Jewellers say that demand remains muted though it has improved than the lockdown period.
Anuj Gupta, deputy vice president (commodities and currencies research) at Angel Broking said “Lower US bond yield support the bullion prices, although escalation of trade tension between US and China also supportive for the bullion. We expect bull run will continue in the precious metals. Traders may use buy on dips strategy.”
Sriram Iyer, senior research analyst at Reliance Securities said: “Reflecting sentiments, SPDR Gold Trust fund said its holdings rose 0.33% to 1,252.38 tonnes on Monday. Escalation of tension between US- China also supported prices. News agencies reported that the US commerce department slapped further restrictions on Huawei‘s access to commercially available chips.Markets will look ahead to the Federal Reserve meeting minutes this Wednesday.”
Analysts said that technically, both gold and silver is sustaining well above support levels and is trading on positive note. The precious metals are expected to trade sideways to marginal upside momentum in coming sessions.
In the international market, spot gold rose 0.5% to $1,994.82 per ounce by 0537 GMT. US gold futures edged 0.2% higher to $2,002.40.