Gold prices today fell for the third day in a row when futures on MCX dipped 0.25% to ₹48460 per 10 gram. Silver also skidded with MCX futures down 0.37% to ₹71,453 per kg.
In the previous session, gold and silver had dipped 0.4% each. Despite the recent slide, gold is one of the best-performing commodities this month, according to Bloomberg. MCX gold has resistance at ₹49,400 and support at ₹47,900, say analysts.
In India, the precious metal has rebounded from ₹44,000 levels, hit in late March this year, amid a uptick in global rates. Rising coronavirus cases in many parts of the world and inflation expectations have lured investors back in gold as an inflation hedge, while central banks maintain their easy monetary stance. In August last year, gold had hit record high of ₹56,200 in India.
Apart from the trend in US dollar and bond yields, hopes of a swift global economic recovery and firm global equities are limiting major gains in the commodity, says Hareesh V, Research Head Commodities at Geojit Financial Services.
In global markets, gold rates were flat today, hurt by an uptick in the dollar and U.S. Treasury yields. Investors also remained cautious ahead of the crucial US inflation data due later in the day. Spot gold was mostly unchanged at $1,896 after earlier this week rising to $1,912.50, the highest level since January.
“Positive outlook for gold likely to intact as long as prices hold the support of $1875. However, immediate resistances are seen at $1925/1970 levels. A direct drop below $1845 would weaken the sentiment, but major downside reversal point is seen at $1810,” says domestic brokerage Geojit.
The dollar index was up 0.13% against rivals, making gold more expensive for other currency holders while benchmark US 10-year Treasury yield rose above 1.61% after better-than-expected US claims for unemployment benefits. Higher yields increase the opportunity cost of holding non-interest bearing gold.
The crucial US monthly personal consumption data, which helps to gauge inflationary pressure in the economy, is due later today.
Fed officials have recently downplayed rising price pressures and affirmed their support to keep monetary policy accommodative for some time.
Among other precious metals, silver eased 0.1% to $27.84 while platinum rose 0.1% to $1,180.81.
Technically, “for silver, the $30 resistance mark continue to keep prices under pressure. However, important support of $25.60 needs to be cleared for extending the weak momentum. Else, prices continue to be volatile in near term,” says Geojit.