Gold prices were firm today in futures trade with prices rising 0.5% to 31,613 as speculators bet on higher prices. At the Multi Commodity Exchange or MCX, gold prices for delivery in February this year rose 157 to 31,613 per 10 grams in a business turnover of 3,282 lots. Similarly, the metal for delivery in far-month April was trading 172, or 0.54 %, higher at 31,765 per 10 grams in 167 lots. Meanwhile, the rupee today hit five-month high of 69.24 against the US dollar, before erasing early gains.

Besides global price and 10% import duty, gold prices in India is determined by the dollar-rupee exchange rate. A depreciation of the rupee increases the domestic price of gold.

On the downside, gold has support at 31320-31400 levels, domestic brokerage Religare Broking said.

In global markets, gold prices perked up, aided by a weaker dollar on expectations that the US Federal Reserve might apply brakes on its monetary tightening cycle in 2019. However, higher equities limited gains for the safe haven metal. Spot gold was up 0.3% at $1,288.60 per ounce and US gold futures gained about 0.4% to $1,290.70 per ounce.

US Fed chairman Jerome Powell said on Friday that he was aware of the risks related to an economic slowdown and would be patient and flexible in policy decisions this year. The dollar index, which tracks the US currency against six major peers, fell 0.2%. Gold is highly sensitive to rising interest rates, which lift the opportunity cost of holding non-yielding bullion.

Meanwhile, markets were closely watching trade negotiations between Washington and Beijing starting later today. Indicating investor appetite for gold, holdings in the SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, rose 0.37 percent to 798.25 on Thursday.

(With Agency Inputs)