Gold’s performance and outlook are also clouded by the Fed’s aggressive monetary policy stance on raising interest rates as it struggles to rein in soaring inflation.
It traded marginally down 0.09 percent or 43 rupees at 50,175 rupees per 10 grams. However, silver futures were down 0.18%, or Rs 110, at Rs 60,668 a kilo.
Higher U.S. short-term interest rates and bond yields raise the opportunity cost of holding gold, which yields nothing. A stronger dollar makes gold less attractive to buyers holding other currencies.
Asian shares edged higher despite the data reinforcing investor concerns that the global economic recovery may be more fragile than expected, although inflationary pressures remain high.
Ravindra Rao, CMT, EPAT, vice president and head of commodity research at Kotak Securities, said gold traded slightly lower on the back of the recent decline in the U.S. dollar index and waning interest from ETF investors.
“The Fed’s tightening stance and safe-haven buying helped the dollar index rebound after three days of losses,” he added. “Gold is likely to remain in a range amid headwinds.”
In the spot market, gold of the highest purity sold at Rs 50,283 per 10 grams on Wednesday, while silver was sold at Rs 61,149 per kilo, according to the Gold and Silver Jewellers Association of India.
Gold spot prices remained below Rs 51,000 for four consecutive sessions, while silver gained around Rs 2,000/kg in the same session.
Trading Strategy “We expect gold to trade sideways on the day with COMEX spot gold support at $1,800 and resistance at $1,830 an ounce. MCX gold June support at Rs 49,900 and resistance at Rs 50,600 per 10 grams,” Tapan Patel, Senior Analyst (Commodities),
Spot gold was steady at $1,816.39 an ounce at 0242 GMT on global markets. U.S. gold futures edged down 0.1% to $1,813.50.
Spot silver edged up 0.1% to $21.41 an ounce, platinum dipped 0.9% to $927.37 and palladium dipped 0.6% to $2,004.58.