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Gold rate today: Yellow metal heads for monthly losses despite gains

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Gold rate today: Yellow metal heads for monthly losses despite gains

New Delhi: Gold prices rose on Friday as U.S. economic data added to its appeal. However, gains were limited by a strong dollar.

The U.S. economy unexpectedly shrank in the first quarter of 2022, data from the U.S. Bureau of Economic Analysis showed on Thursday. Meanwhile, the dollar traded at a two-decade high.

Despite today’s gains, safe-haven bullion is still set for its biggest monthly drop since September on bets the Federal Reserve will aggressively hike interest rates.

Gold futures on MCX rose 0.51% or 260 rupees to trade at 51,522 rupees per 10 grams. However, silver futures were up 0.33% or 260 rupees at 64,790 rupees per kilo.

Higher U.S. short-term interest rates and bond yields increase the opportunity cost of holding zero-yielding bullion. A stronger dollar makes dollar-denominated gold less attractive to holders of other currencies.

Rahul Kalantri, vice president of commodities at Mehta Equities, said: “Gold and silver bulls are trying to stem the price declines that recently pushed prices to nine-week lows. A strong dollar and rising bond yields have been hitting these metals.

“The euro fell to a five-year low against the dollar as soaring energy prices weighed on the euro zone economy. The dollar index rose solidly again today, hitting another two-year high,” he added.

In the spot market, gold of the highest purity sold at Rs 51,526 per 10 grams on Thursday, while silver was sold at Rs 64,266 per kilo, according to the Gold and Silver Jewellers Association of India.

The spot price of gold has fallen by around Rs 2,100 per 10 grams in the past nine sessions, while silver has lost around Rs 5,850 per kilo over the same period.

Ravi Singh, vice president and head of research at ShareIndia, said the U.S. dollar index surged and gold prices were in correction mode on expectations of aggressive monetary policy tightening by the Federal Reserve at its upcoming meeting

“The outcome of the meeting could determine the next trigger for gold prices. Gold has immediate support around Rs 50,800,” he added.

Trading strategy “We expect gold prices to trade sideways on the day with COMEX spot gold support at $1,890 and resistance at $1,910 an ounce. MCX Gold June support at 51,200 rupees and resistance at 51,900 rupees per 10 grams,” said Tapan Patel, Senior Analyst (Commodities), HDFC Securities.

Spot gold was up 0.3% at $1,899.00 an ounce by 0247 GMT on global markets, but has fallen about 2% so far this month. U.S. gold futures rose 0.6 percent to $1,902.10.

Spot silver was up 0.1% at $23.16 an ounce, platinum was down 0.5% at $915.19 and palladium was up 0.5% at $2,243.74. All are set to drop monthly.

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