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Gold rates fall further for 2nd day, down ₹10,000 from record high, silver downs too

By Saima Siddiqui 
Updated Date

New Delhi: The rate of precious metals, Gold and silver, edged lower on Monday in Indian Markets amid a hardening of US bond yields. On MCX, gold futures slipped 0.03% to ₹46,580 per 10 gram, while silver fell 0.15% to ₹66,884 per kg. In the previous session, the yellow metal had dropped 0.5% but for the week posted strong gains. MCX gold has support at ₹44,940 and resistance at ₹47,380, says a domestic brokerage.

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In Indian Market, gold prices have rebounded from year-low levels of ₹44,000 hit earlier this month. Various factors like jump in global rates, rupee’s depreciation and renewed concerns over Covid cases have supported gold at lower levels. Gold had hit a record high of ₹56,200 last August.

The rupee fell over 2% last week against the US dollar, its biggest weekly fall since August 30, 2013. “The Indian rupee depreciated on Friday and started of the new fiscal year on a weak note against the dollar in seven years on the back of the central bank’s quantitative easing announcement which could lead to inflationary pressures and importer covering,” Reliance Securities said in a note. Weaker rupee pushes up the landed cost of gold in India, which imports most of its gold requirement.

In global markets, the precious metal edged lower amid hardening US bond yields on inflation concerns. Spot gold was down was down 0.3% at $1,737.07 an ounce. Other precious metals were also under pressure. Silver fell 0.2% to $25.20 while platinum was flat at $1,197.

“The immediate upside turnaround point is seen at $1760, which is needed to be cleared for continuation of further rallies in the counter. Meanwhile, inability to do so expect corrective selling pressure but stiff support is placed at $1680,” Geojit said.

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Higher-than-expected March producer price data fueled inflation concerns in US, lifting bond yields. Higher bond yields increases the opportunity cost of holding gold, which pays no interest.

Many analysts still see the possibility of gold coming under renewed pressure over next few months. “Sudden jump in price does not necessarily suggest that downtrend is over. There is a possibility prices may go down again to $1605 level in next few months,” said Debajit Saha, Lead Metals Analyst at Refinitiv, an LSEG Business.

On Tuesday, the U.S. releases inflation data and on Thursday, comes US data including initial jobless claims, industrial production and retail sales.

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