Gold futures prices for June delivery on the MCX traded higher by Rs. 215 at above Rs. 47500. This is on dollar retreat and also as appreciation in the rupee against the dollar is keeping any major upside in gold price under check. Also, what has been favouring gold's upside is its quality of being a hedge against inflation.
Spot gold prices on the COMEX also inched higher by 1.87% to $1776.51 per ounce. Meanwhile, Gold ETF holdings also continued to decline and from the previous week's 1033 tonnes, it has been dragged to 1020 tonnes.
On increased buying for industrial production, silver prices outperformed gold prices and surged to as high as Rs. 68487 per kg.
On inflation worries, gold prices posted their best week in four months plus what supported rise in gold prices is the fall in the US treasury yield as well as decline in dollar.
Other factors pushing gold higher
1. Intensifying geopolitical tension after the US imposed sanctions on Russia.
2. Rising coronavirus situation and the consequent partial lockdown in India and Brazil.
Gold price outlook
Gold prices are expected to trade sideways as prices are witnessing strong resistance close to $1785 per ounce. The break up above this level would lead prices to $1820. For MCX gold, near term resistance is Rs. 48000 and support is placed at Rs. 46800 per 10gm.