Bengaluru: Global gold prices rose on Wednesday as investors used dips to accumulate the yellow metal after it dropped more than 1% to its lowest in over three weeks in the previous session.
Spot gold prices was up 0.3% to $1,328.86 per ounce, as of 0444 GMT. Prices fell over 1% to hit its lowest since 11 January at $1,319.96 on Tuesday. US gold futures for April delivery rose 0.2% to $1,331.60 per ounce.
“Some dip-buying is coming back aggressively as the volatility index drops. Also, some good buying as the short-term US (interest) rate curve is easing off a bit," said Stephen Innes, APAC trading head for OANDA.
“(Prices are) well above major support and appetite is coming back, with longer-term traders still holding and steadily buying small clips from this morning Comex open."
Asian share markets were trying to find their footing on Wednesday as a semblance of calm returned to Wall Street where major indices bounced into the black after days of deep losses.
Distressed selling by leveraged funds seemed to have run its course at the moment, allowing volatility to slightly abate, though the prospect of monetary tightening across the globe remained a challenge for the long term, analysts said.
Unless the market plunge intensifies and damages the economy, US Federal Reserve policymakers is unlikely to budge from their plan to lift key short-term interest rates three times this year, some analysts said.
However, traders dialled back bets the US central bank would ratchet up the pace on rate increases on Monday to between two and three hikes from three to four hikes last week, according to interest rates futures.
Meanwhile, SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, said its holdings fell 1.44% to 829.27 tonnes on Tuesday from 841.35 tonnes on Monday.
Holdings saw their worst one-day fall since December 2016.
“Gold did not particularly perform well when stocks were melting down, while seeming to crumble rather effortlessly in the aftermath of Tuesday’s sharp rally," INTL FCStone analyst Edward Meir said. “This may tell us that the gold complex is more vulnerable to the downside at this stage, especially if the stock market stabilizes."
Spot gold prices may test a support at $1,316 per ounce, as suggested by a retracement analysis and a head-and-shoulders, according to Reuters technical analyst Wang Tao.
Spot silver prices climbed 0.6% to $16.73 per ounce.
Platinum gained 0.1% to $990.00 per ounce after touching its lowest since 16 January in the previous session. Palladium slipped 0.1% to $1,007.50 per ounce. In the previous session, it touched $999.22 an ounce, its lowest since 8 December. Reuters.