COMEX Gold futures managed to hold onto their recent gains after a break above $1300 per ounce as the yellow metal eyed an uptick in fund buying and ideas that Indian demand would be strong in coming wedding season. The global equities witnessed a rather tepid movement following surge in first two months of the year and Gold seems to be benefiting from it. The yellow metal closed at $1302 per ounce.

Gold has been also supported on tepid Chinese economic data. Some traders are also eyeing a pickup in global commodity prices. Base metals and crude oil futures have been elevated in recent weeks and now there is evidence that the agri commodity prices are also on an upward trajectory. The FAO Food Price Index (FFPI) averaged 167.5 points in February 2019, up 2.7 points (1.7%) from January. While the February value of the FFPI marked its highest level since August 2018, it remained nearly 4 points (2.3%) below its level in the corresponding month last year.

Prices of all commodities represented in the FFPI rose in February, with sharp increases registered for dairy prices. Rising commodity prices generally tend to result in a flare up of inflationary pressures and are seen as supportive for the Gold prices. Meanwhile, the MCX Gold futures broke under Rs 32000 per 10 grams and closed just above Rs 31800 per 10 grams as the Indian Rupee soared to around seven month high, topping 69 per US dollar levels.

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