Precious metal prices on Friday: Gold prices soften to Rs 77,070 per 10 gm, silver also was down around Rs 650/kg
As dolllar and treasury-yield after the US Fed rate cut, bullion rose in early trade, but erased most of the gains later in the day to trade in the red.
Gold prices in Friday's session post the in-line Fed rate cut of 25 basis points slipped in the red. On the MCX, tracking gold price movement overseas, Gold December futures traded with a drag of Rs 341 or 0.44 per cent at Rs 77,070 per 10 gm.
Early in trade on Friday, spot gold headed higher by a margin extending previous day's sharp gains of as much as 1.8 per cent spurred after the FOMC's 25 bps rate cut. The gains came paring some of the losses seen after Donald Trump won the key US Presidential elections.
Nevertheless, the gains cooled later, with the Spot Gold now hovering with a cut of 0.75 per cent or $20.19 per ounce at $2,686.32 per ounce.
Spot gold rate in domestic markets
In the domestic markets, gold traded at Rs 76,503 per 10 gm in the previous day's trade.
Low interest rate regime supports bullion
Being a non-interest yielding asset, gold will gain attraction in the low interest-rate environment.
Gold prices recover from one-momth low
Rahul Kalantri, VP Commodities, Mehta Equities pointed out that gold and silver prices rebounded from one-month lows following interest rate cuts by both the U.S. Federal Reserve and the Bank of England. The Fed reduced rates by 25 basis points, a move mirrored by the Bank of England, which provided support to bullion prices.
Dollar and treasury-yield also supported bullion
The dollar index and U.S. 10-year bond yields eased from four-month highs after the Fed's monetary policy meeting, further boosting gold and silver. I
Fed Chair noted Trump victory to result in immediate change in economic policies
Kalantri underscored that the Fed Chairman in his statement indicated that Donald Trump's election victory would not have an immediate impact on economic policies. The Fed will continue to monitor inflation and employment data to guide future monetary easing measures.
Gold and silver support and resistance price
Kalantri notes that gold is expected to find support at $2,674–$2,655, with resistance at $2,718–$2,735. Silver has support levels at $31.64–$31.50 and resistance between $32.22–$32.45. In Indian rupees, gold has support at Rs 77,220–76,950, with resistance at Rs77,880–78,160. Silver support lies at Rs 91,680–90,850, while resistance is seen between Rs 92,840–₹93,380, he added.