Gold prices in India edged higher today, rising for the third day. On MCX, prices of December future contracts rose 0.14% to 38,150. Silver prices on MCX also moved 0.33% higher to 44,680 per kg. Gold prices in India have pulled back from around 37,500 levels, tracking a similar move in global markets and a depreciation in the rupee. Despite the recent gain, gold remains down about 1,850 per 10 gram from record highs of about 40,000, hit in early September.

In domestic spot markets, price of 24 Karat gold in Delhi rose marginally to 38,995 per 10 gram while silver prices gained 50 to 45,726 per kg, Press Trust of India reported, citing HDFC Securities.

"Spot gold prices for 24 Karat in Delhi were trading up by 15 and the upside was limited on rupee appreciation. The spot rupee was trading 16 paise stronger against the dollar during the day," HDFC Securities Senior Analyst (Commodities) Tapan Patel said.

In global markets, spot gold prices were marginally higher at $1,464.31 per ounce. China's industrial output grew significantly slower than expected in October. This along with uncertainty over US-China trade deal helped support gold prices.

"Gold has recovered from 3-week low on dip buying and as market players continue to assess possibility of a US-China trade deal. After days of optimism that US and China are closing in on a deal, market players grew skeptical as President Trump warned that there could substantial tariffs if no deal is struck," Kotak Securities said in a note.

"Gold has also benefitted from geopolitical tensions amid intensifying anti-government protests in Hong Kong and other nations like Chile, Bolivia etc," it added.

However, capping the rise in gold prices, US Federal Reserve Chair Jerome Powell on Wednesday told the Joint Economic Committee that negative interest rates sought by US President Donald Trump are not appropriate for the US economy right now. The US central bank chief also said that Fed would probably stop (with interest rate cuts) where it is unless there is a "material" change in the economic outlook.

A lower interest rate reduces the opportunity cost for holding the non-yielding bullion. The US Fed has already cut interest rates thrice this year to help sustain US growth.

Investors continued to remain on the sidelines, watching the progress in US-China trade talks. The holdings of the world's largest gold-backed exchange-traded fund, SPDR Gold Trust fell 0.04% to 896.77 tonnes on Wednesday.

"Gold has recovered from recent lows and disappointing economic data and trade uncertainty we could see some extended gains. However, overall bias is still weak owing to strength in US dollar and Fed’s emphasis on keeping rates steady," Kotak Securities added. (With Agency Inputs)

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