Gold rates reported for early trading on Tuesday have slumped due to pressures from improved trader and investor attitudes because the first week of the New Year concluded on a positive note. The US dollar index has also rebounded, placing pressure on the precious metals market. Experts believe that it is normal for the bullion market to have price weakness due to normal corrective pullback.
The trade policies in 2018 pushed gold prices to an all time six-month high last week. It is widely believed that dovish remarks by the US Federal Reserve’s chairman Jerome Powell will continue to support the bullion market. Powell commented on Friday that the central bank would have a more flexible policy for its monetary rates.
This should support the price for gold for some time as Powell raised the possibility of pauses in gradual tightening by the Fed.
Meanwhile in India, today’s gold rate has strongly recovered by gaining Rs. 150 to jump to Rs. 32,650 per 10 grams. This is due to higher global rates and increased buying by local jewelers who are strongly supporting domestic gold prices. Following gold rates, silver rates also surged by Rs. 410 to Rs. 40,101 per kg due to higher manufacturing rates by coin makers and industrial units. Weekly-based delivery for silver went up by Rs. 136 to Rs. 39,309 per kg.
The prices of 99.9% and 99.5% gold increased by Rs. 150 each to Rs. 32,650 and Rs. 32,500 per 10 grams respectively. This is in stark contrast to gold prices falling in the previous season by Rs. 190.
It should be noted that the sovereign prices remained flat at Rs. 25,200 per piece of eight grams. Silver coins also remained unchanged at Rs. 77,000 for selling and Rs. 76,000 for buying 100 pieces. February gold futures rose by Rs. 207 to Rs. 31,663 per 10 grams against a business turnover of 6756 lots.
The European stock market has been reporting higher earnings overnight, but its Asian counterpart hasn’t been doing as good. The US stock indexes are inching towards higher openings as the New York day session begins.
The US-China trade talks are currently underway to see if the stalemate between the two countries could be set on the right course. Chinese President Xi Jinping persuaded Donald Trump to abandon his plans to impose tariffs of $200 billion on Chinese goods.
Analysts also observed that gold bullion is testing solid resistance at $1,300, with first resistance observed at the overnight high of $1,291.40 and Monday’s high of $1,297.00.
Gold traders are now patiently waiting for the trade relations between US and China to improve, which is currently underway.
New Job Creation Coincides with Gold Gains
The US economy added 312,000 new jobs in December and bolstered the payroll, which comes after a relatively modest rise of 176,000 new jobs in November. Analysts pegged new job creations to slightly above 182,000. Instead of struggling, gold prices have been rallying, testing resistance at above $1,290 on Monday.