Analysts also attribute the rise in gold prices to new positions formed by participants.
In international markets, spot gold was at $1,951.79 an ounce after hitting its highest level since April 2022 earlier in the session. US gold futures rose 1.3% to $1,967.40.
The dollar index fell 0.3%, making bullion cheaper for foreign currency holders. The index is currently hovering slightly above the 100.9 levels.
“Gold and silver traded sharply higher in domestic markets following the announcement of the Union budget, where import duties on gold remained unchanged while an increase in import duties “Import on silver was impacted. In international markets, bullion posted gains and closed at its daily price given a modest interest rate hike by the Federal Reserve that was widely expected,” said Rahul Kalantri, vice president of commodities, Mehta Equities.
“We expect gold and silver to remain volatile during today’s session. Gold has support at $1938-1926 while resistance is at $1962-1974. support at $23.98-23.72, while resistance is at $24.42-24.60,” Mehta said.
Investors also followed the US Fed’s 25 basis point interest rate hike, which added to the attractiveness of gold bullion. Going forward, traders will focus on economic data and comments from Fed officials for further direction. the high model before confirmation. Now the price needs to hold above the resistance at $1967/oz and if that happens the bulls might aim for the psychological $2000/oz.
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Gold tends to benefit from a low interest rate environment because it reduces the opportunity cost of holding non-performing bullion. If there are more signs of a slowdown in the US economy and the Fed continues to cut rates, investor demand for gold will increase.
Meanwhile, the Bank of England and the European Central Bank are expected to raise rates by 50 basis points later today.
Elsewhere, spot silver gained 0.8% to $24.17 an ounce, hitting a one-week high. Platinum rose 0.6% to $1,009.69 while palladium edged down 0.2% to $1,665.82.
(With agency contributions)
(Disclaimer: The recommendations, suggestions, views and opinions given by the experts belong to them. These do not represent the views of Economic Times)
