Gold prices eased in Indian markets on Friday but gained for the week. On MCX, gold futures fell 0.2% to ₹49,209 per 10 gram, snapping a three-day winning streak. For the week, however, gold gained about ₹1,200 per 10 gram, tracking a similar trend in global markets. Silver futures on MCX however edged 0.3% higher to ₹63,848 per kg.
Jateen Trivedi, Senior Research Analyst (Commodity & Currency) at LKP Securities, said gold gained this week on back of weakening dollar, and hopes of US stimulus package which keep dollar price weak.
The broad range in gold is seen between ₹48,000 and ₹50,250 in domestic markets in near term, he said. In August, gold had hit a high of ₹56,200 in domestic markets.
Domestic gold prices also came under pressure on Friday as rupee gained against the US dollar after RBI upgraded its GDP target for the current fiscal year and kept interest rates steady even in the face of high inflation. The rupee snapped its two-day losing streak to close 13 paise higher at 73.80 against the US dollar on Friday. India imports most of its gold requirement.
Despite a weak jobs report and muted dollar, in international markets, gold prices eased as equities rallied amid growing prospects for a US coronavirus relief package. Spot gold eased to $1,838 per ounce but for the week gained about 3%.
Non-yielding bullion, is often seen as a hedge against inflation that is likely to result from the unprecedented stimulus measures.
Prospects of more US stimulus brightened after a weak jobs report. The US economy added the fewest workers in six months in November, with nonfarm payrolls increasing by 245,000 jobs last month after rising by 610,000 in October, the Labor Department said on Friday. A bipartisan, $908 billion coronavirus aid bill drew support in the U.S. Congress on Thursday.
U.S. Treasury bonds, meanwhile, dipped in anticipation of increased borrowing to fund economic recovery measures.
“Gold has recovered substantially from recent lows and remains supported by weaker US dollar however the gains may extend only once we see pick up in investor-buying or concrete measures on stimulus front,” Kotak Securities said in a note.
(With Agency Inputs)
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