NEW DELHI: Gold prices inched higher on Monday as the US dollar eased and tamer-than-expected US inflation data allayed fears of an early monetary policy tightening by the Federal Reserve. The yellow metal remained firm with mild gains in the domestic market.

US consumer spending paused in May, while the personal consumption expenditures price index, the Fed’s preferred inflation measure, came in below expectations.

The dollar index eased against rivals, making gold cheaper for holders of other currencies. Some investors view gold as a hedge against higher inflation.

On the physical front, the gold market in top consumer China flipped into a premium last week as prices eased although activity was subdued, while buyers in India held off for a sharper dip in rates. ETF outflows also showed weaker investor interest.

Gold futures on MCX were up 0.10 per cent, or Rs 47, at Rs 46,973 per 10 gram. Silver futures gained 0.21 per cent, or Rs 145, to Rs 68,018 per kg.

“Gold prices traded steady on Monday with spot gold prices at COMEX trading near $1,780 per ounce in morning trade. The yellow metal reported the first weekly gain in the last four weeks on US inflation concerns,” Tapan Patel, Senior Analyst (Commodities), HDFC Securities, said.

In the spot market, highest purity gold was sold at Rs 47,205 while silver was priced at Rs 68,467 on Friday, according to the Indian Bullion and Jewellers Association.

“Gold prices also got support from worries over rising cases of Delta variant of coronavirus across the globe. The recent US inflation data and Covid worries may support gold prices to keep firm trading range,” Patel said.

Trading strategy

“We expect gold prices to trade sideways to up with COMEX spot gold support at $1,765 and resistance at $1,800 per ounce. MCX Gold August support lies at Rs 46,700 and resistance at Rs 47,300 per 10 gram,” he said.

Global markets

Spot gold was up 0.1 per cent at $1,781.19 per ounce by 0109 GMT. US gold futures rose 0.1 per cent to $1,780.30.

Silver was steady at $26.07 per ounce, palladium rose 0.2 per cent to $2,641.38. Platinum eased 0.1 per cent to $1,109.64.