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Global gold prices found some respite today after slumping to lowest in more than six months on Tuesday, amid a rally in US dollar.  The greenback surged to the highest in more than two years as investors retreated to the haven, putting pressure on bullion. Today gold prices recovered a bit, rising 0.4% to $1,770.71 per ounce. On Tuesday, gold fell 2.3% to $1,767.53 an ounce, the lowest since December in intraday trading. In India, the fall in bullion has been cushioned by the recent import duty hike.

Global gold prices had lost more than 2% on Tuesday, as sharp gains in the dollar and rising interest rates sapped appetite for the non-yielding asset and sent prices tumbling through psychological support at the $1,800 per ounce level. Higher interest rates and bond yields raise the opportunity cost of holding bullion, which yields nothing.

“Weak bias to continue initially. However, if it breaks above $1815 could negate the view and take prices higher," domestic brokerage Geojit said in a note. 

The “intraday bias on silver remains on the weaker side. A direct turn above $22.50 is a sign of reversal of the current momentum," it added. 

On Friday, the Indian government hiked basic import duty on gold from 7.5% to 12.5%. India meets most of its gold requirement via imports. Besides import duty and global prices, domestic bullion prices track rupee-dollar movement and GST rates. Currently, a 3% GST is levied on the precious metal. 

Today, gold futures on MCX were slightly higher at 51,396 per 10 gram while silver edged up to 56917 per kg.  On Tuesday, gold fell 1.5% in India while silver slumped around 3%. 

Gold rates hit nearly seven month lows while silver slipped to 2-year lows in the international markets. Gold and silver crashed vertically on Tuesday after the dollar index hit 20-year highs and crossed 106 marks on global recession fears.A pronounced drop in the euro also aided the dollar’s gain, driven by bets that the European Central Bank will be slower in tightening monetary policy than the Fed. Gold has support at $1755-1742, while resistance is at $1782-1794. Silver has support at $19.30-19.05, while resistance is at $19.95-20.20," said Rahul Kalantri, VP Commodities, Mehta Equities Ltd. 

In rupee terms, “gold has support at 51,110–50,920, while resistance is at 51,520–51,740. Silver has support at 56,150-55,750, while resistance is at 57,480–57,910," he added. 

 

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