Gold prices extended gains for the second day tracking international gold rate movement. On the MCX, gold futures (October) traded higher by 0.58 per cent at Rs 73,249 per 10 gm, while silver futures (December) were up 0.83 per cent or Rs 726 at Rs 87,821 per kg.

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Precious bullion is gaining ground as the rate cut bets increased after the latest PPI and jobless claims data in the US.

Manoj Kumar Jain, Director- Prithvi Finmart said, "On Thursday, gold and silver settled on a positive note in the international markets. Gold December futures contrac settled at $2,580.60 per troy ounce up by 1.50% and silver December futures contract were settled at $30.11 per troy ounce, up by 4.07%. Domestic markets were also settled on a positive note."

Gold and silver posted solid gains after hefty interest rate cuts by the ECB and weakness in the dollar index. The European Central Bank cuts deposit rates by 25 basis points to 3.50 per cent and refinancing rates by 60 basis points to 3.65% from 4.25 per cent earlier. The dollar index plunged and the U.S. 10-year bond yields slipped below 3.70 per cent once again.

Gold prices hit lift-time high in the international markets and silver prices also surged to 3-week highs after ECB rate cuts. The U.S. CPI inflation was also in line with the expectations and the U.S. jobless claims increased last week to 2,30,000 from 2,27,000 claims in the previous week. The U.S. inflation and unemployment data will prompt the U.S. Fed for larger rate cuts in the upcoming policy meetings and could support gold and silver prices.

Initial jobless claims rose to 230,000, while continuing claims increased to 1.85 million, adding to economic uncertainty and supporting gold prices, noted Neha Qureshi, Senior Technical & Derivative Analyst, Anand Rathi Commodities & Currencies.

Trading strategy in gold and silver

For MCX October Gold futures, Queshi has suggested to buy the precious metal at Rs 72800 with a stop loss of Rs 72600 and a price target of Rs 73100. Similarly for  MCX DECEMBER silver futures, the expert has given a 'buy' at Rs 87000 with a stop loss of Rs 86000 and a price target of Rs 89000.