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Gold prices fall sharply again today , down ₹800 in 2 days

By Priyanka Verma 
Updated Date

Gold struggled in Indian markets today as global rates fell to more than one week low. On MCX, gold futures were down 1% to ₹48,400 per 10 gram, extending losses to the second session. Silver futures on MCX were down 0.6% to ₹71,784 per kg.

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In the previous session, gold had declined 0.65% while silver had edged 0.3% higher. Technically, MCX gold has support ₹47,350 and resistance at ₹49,200, say analysts.

In India, gold had hit a five-month high of ₹48,700 earlier this month and since then have struggled amid weak global cues.

In global markets, gold prices were down 0.6% today to $1,864.58 per ounce, its lowest in more than one week. A stronger US dollar weighed on gold. Investors also remained cautious ahead of Federal Reserve policy meeting later this week. They await for further clarity on the policymakers’ view on rising inflation and monetary policy going forward.

Gold is likely to be on weaker side today with support seen at $1855, says domestic brokerage Geojit. “A direct drop below $1855 is an early sign of major weakness. Further rallies are seen only a close above $1915,” it added.

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Among other precious metals, silver slipped 0.3% to $27.80 per ounce while platinum declined 0.6% to $1,143.71.

On silver, Geojit said, “inability to cross the immediate upside obstacle of $28.50, there are chances of selling pressure to continue towards $26.80 initially. A direct break of which the momentum may extend for near future. Rallies above $30 would call for sharp recovery pullbacks later.” MCX silver has support at ₹69,200 and resistance at ₹72800, it added.

The dollar strengthened 0.1% to hover near a one-week high against its rivals, making gold more expensive for holders of other currencies.

Jigar Trivedi, Research Analyst- Commodities Fundamental, Anand Rathi Shares & Stock Brokers, said: “As dollar has appreciated in the early Asian trading session, the outlook for gold is bearish for intraday. Having said that, investors now turn their attention to the Fed’s monetary policy decision later in the week, with expectations that the central bank will continue to remain ultra-accommodative until the economy has further recovered.”

Also putting pressure on gold rates, US benchmark Treasury yields edged higher today. Last week, data showed US consumer prices rose sharply in May. However, Fed officials have repeatedly said that inflation would be transitory and expect monetary stimulus would stay in place for some time. Analysts also expect the Fed to reaffirm its ultra-loose policy later this week.

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Morgan Stanley in its research note on Friday said it expects the Fed at its upcoming policy meeting to lay the groundwork for increased flexibility on its quantitative easing program by “talking about talking about tapering”.

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