Indian rupee opens stronger, gold prices show upward trend

New Delhi, May 19 (IANS) The Indian rupee opened 12 paise stronger at 85.44 against the US dollar on Monday, amid a backdrop of global economic developments and market reactions.

The Indian rupee closed at 85.52 a dollar on Friday.

Meanwhile, gold prices increased almost 1 per cent in the morning session of trade on the domestic futures market on Monday, amid a weaker dollar and renewed fears of Donald Trump-era trade tariffs.

MCX Gold June 5 contract traded 0.95 per cent higher at Rs 93,317 per 10 grams in the morning trade. Meanwhile, the dollar index declined nearly 0.3 per cent, supporting gold prices. A decline in the US dollar makes gold cheaper in other currencies, enhancing its demand.

Rahul Kalantri, VP of commodities at Mehta Equities, said that gold has support at $3,195-3,175 and resistance at $3,245-3,260. Silver has support at $32.10-31.80 and resistance at $32.65-32.85.

“Gold prices climbed above $3,220 per ounce on Monday, rebounding from last week’s steepest decline in six months. The recovery was fueled by renewed safe-haven demand after Moody’s downgraded the US sovereign credit rating, citing fiscal imbalances and rising debt costs,” he mentioned.

Despite recent optimism from a temporary US-China tariff truce, weak US economic indicators and subdued inflation have led markets to price in additional interest rate cuts by the Federal Reserve, offering further support to bullion.

“In INR, gold has support at Rs 91,850-91,480 while resistance at Rs 92,850-93,490. Sliver has support at Rs 94,480-94,850 (per kg) while resistance at Rs 95,950-96,650,” he added.

Gold prices have remained rangebound over the last two sessions due to a lack of positive triggers as the US reached a temporary truce with China and tensions between India and Pakistan have also eased.

However, domestic buying ahead of the upcoming wedding season in India will ensure that the downside is capped and prices remain at elevated levels, said Aksha Kamboj, Vice President, India Bullion and Jewellers Association (IBJA).

--IANS

na/