Gold prices advanced in early trade on February 27 supported by geopolitical uncertainty and a softer US dollar. On the Multi Commodity Exchange (MCX) gold April futures rose nearly 0.30%, to Rs. 1,60,177 per 10 grams. Silver outperformed with March contracts surging over 3%, to Rs. 2,66,800 per kilogram.
The rebound follows a weak previous session in which gold April futures settled at Rs. 1,59,709 per 10 grams. It is down nearly 1% while silver ended over 3% lower at Rs. 2,59,669 per kilogram.
The price of 24K gold increased by Rs. 55 in early trade with ten grams of the precious metal trading at Rs. 1,61,570.
The price of 22K gold also increased by Rs. 50 with ten grams of the yellow metal selling at Rs. 1,48,100.
The price of ten grams of 24K gold stood at Rs 1,61,570 in Mumbai and Kolkata and Rs 1,62,550 in Chennai.
In Delhi the price of ten grams of 24K gold stood at Rs 1,61,720.
Investor sentiment turned cautious after high-level talks between the United States and Iran concluded without a formal agreement.
Although Oman acting as mediator indicated that progress was made and further technical discussions are scheduled in Vienna next week tensions are still elevated.
Recent comments from US Secretary of State Marco Rubio calling Iran a very grave threat have reinforced geopolitical uncertainty.
US dollar index which earlier climbed to 97.82 eased slightly to around 97.69. A softer dollar tends to make gold more attractive for holders of other currencies.
Meanwhile US weekly jobless claims rose by 4,000 to 2,12,000 for the week ended February 21 and it indicates a stable labour market.
According to CME’s FedWatch Tool, traders are pricing in three 25-basis-point rate cuts from the Federal Reserve this year although near-term rate cut expectations remain measured.
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On MCX gold has immediate support at Rs. 1,58,200 and Rs. 1,56,500. Resistance is seen near Rs. 1,61,000 and Rs. 1,62,500. Silver support is placed at Rs. 2,55,000 and Rs. 2,48,800 with resistance around Rs. 2,64,600 and Rs. 2,71,000.
Internationally gold has support at $5,164 and $5,122 while resistance is at $5,222 and $5,265 per troy ounce. Silver has support at $84.40 and $80.80 while resistance is at $90.00 and $92.40 per troy ounce.