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Gold and silver prices in India soared today, tracking firm global rates. On MCX, gold rose nearly 800 to one-month high of 52,200 per 10 gram - the biggest single day gain in one month. Silver futures jumped 1.2% to 58,250 per kg.  In global markets, the yellow metal rose 0.7% to $1,777.91 per ounce, supported by a pullback in the dollar and US Treasury yields. 

The price of non-yielding gold is sensitive to interest rates. Gold traders will be closely looking at the US jobs data due on Friday.

Among other precious metals, spot silver rose 0.7% to $20.18 per ounce while platinum gained about 1% to $906.57.

“Comex gold traded higher amid choppiness in US dollar and bond yields as market players assess US economic numbers and central bank comments to determine future move. Market players are also positioning for Bank of England interest rate decision as the central bank is expected to fasten rate hikes to control inflation," said Ravindra Rao, VP- Head Commodity Research at Kotak Securities.

"ETF outflows however show weaker investor interest in the metal despite price recovery. Gold may remain volatile as market players react to data and central bank stance however with Fed officials maintaining support for rate hikes, the US dollar may remain supported which may keep pressure on gold," he added. 

Gold rates in India have recovered from near two-month lows, hit in July, tracking lower global rates after hotter-than-expected US inflation data. Prices had slipped, as Treasury yields and the dollar rose, with bullion's outlook hurt by fears the Federal Reserve could go for a more aggressive interest rate hike this month.

Analysts say that the key test this week is US non-farm payrolls data. Amid other factors, gold is supported by increased tensions between US and China over visit of US House Speaker Nancy Pelosi to Taiwan. However, weighing on gold price are concerns about consumer demand in India and China and weaker investor interest. 

“The continuing outflows show that investors are not convinced that recent price gains may sustain. We have seen a break in gold’s upward momentum and we may see some more correction if US dollar manages to hold firm ahead of next major event which is US non-farm payrolls data on Friday," Kotak Securities said in a note.  (With Agency Inputs)

 

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