NEW DELHI: Gold prices edged lower on Wednesday, tracking a weak global trend, although the declines were marginal. A stronger US dollar and elevated bond yields dented bullion’s safe-haven appeal ahead of key central bank meetings in the coming few days.
Gold futures on MCX were trading 0.10 per cent or Rs 58 lower at Rs 47,763 per 10 grams. Silver futures were flat, up 0.02 per cent or Rs 10 at Rs 64,999 per kg.
The precious metal had rallied to over one-month peak late last week, but rising US treasury yield has increased non-interest bearing gold’s opportunity cost.
Gold is often considered an inflation hedge, though reduced stimulus and interest rate hikes push government bond yields up, translating into a higher opportunity cost for holding bullion.
Ravi Singh, Vice President & Head of Research, Share India said that the focus is on the key meetings of the Bank of Japan and the European Central Bank (ECB) scheduled on Thursday and next week’s Federal Reserve and Bank of England policy decisions.
“Investors are treading cautiously this week due to uncertainty over the timing of central bank rate hikes amid rising inflation concerns. After a continuous rally, gold witnessed profit booking yesterday which may sustain for a few more trading sessions,” he added.
In the spot market, the highest purity gold was sold at Rs 48,171 per 10 grams while silver was priced at Rs 65,453 per kg on Tuesday, according to the Indian Bullion and Jewellers Association.
The spot price of the yellow metal has gained over Rs 2,300 per 10 grams in the last month of October thus far, whereas Silver has jumped about Rs 7,350 per kg during the period under review.
Trading strategy
“We expect gold prices to trade sideways to down for the day with COMEX Spot gold support at $1,775 and resistance at $1,810 per ounce. MCX Gold December support lies at Rs 47,600 and resistance at Rs 48,200 per 10 gram,” said Tapan Patel, Senior Analyst (Commodities), HDFC Securities.
Global markets
Spot gold was down 0.2 per cent at $1,788.66 per ounce, as of 0157 GMT. U.S. gold futures dropped 0.2 per cent to $1,790.60.
Spot silver fell 0.8 per cent to $23.95 per ounce. Platinum eased 0.7 per cent to $1,020.61 and palladium edged 0.3 per cent lower to $2,005.51.