The precious metals continued to decline in the Indian markets after a sharp fall in the previous session. MCX gold futures down 0.3% 50,881 per 10 grams, following a 1,000 drop in the previous session. Silver futures fall by 1.2% 58,360 per kg. In the international markets, gold was trading at $1,665.89 an ounce, under pressure on prospects of a more bullish rise in the US dollar. Traders remained cautious even ahead of key inflation data for the end of the week. A stronger US dollar makes gold more expensive for buyers holding other currencies, while stronger bond yields also increase the opportunity cost of holding non-yielding bullion. The benchmark US 10-year Treasury yield was just shy of 4%.
After stronger-than-expected US jobs data, the focus is now on Thursday’s inflation reading. Although gold is considered a hedge against inflation and economic uncertainties, rising rates reduce the appeal of the non-yielding metal.
Spot silver fell 1.3% to $19.39 an ounce.
“Safe-haven metals have been hit hard by a higher US dollar index, raising US Treasury yields to start the trading week. The Russo-Ukraine war has intensified as Russia has launched missiles at several Ukrainian cities. The dollar index is trading comfortably at 113 points while the 10-year bond yield has crossed 3.95%. Traders are looking forward to key US inflation reports on Wednesday and Thursday which will provide clear guidance for the further direction,” said Rahul Kalantri, VP Commodities, Mehta Equities Ltd.
,Sleep There is support at $1655-1642, while resistance is at $1678-1686. Silver has support at $19.10-18.88, while resistance lies at $19.72-19.95. Gold has support in rupee terms 50,720-50,540, while resistance lies at Rs.51,210, Rs.51,350. Silver has support at Rs 58,450-57,940, while resistance lies at Rs 59,480-59,850.
In equity markets, world stocks tumbled back to their lowest levels in nearly two years, weighing on rapidly rising interest rates, an escalation in the Ukraine war and sentiment about China stepping up pandemic measures.
“Gold prices may remain under pressure today as the dollar continues to rally and the US 10-year Treasury yield rose to 4% ahead of the minutes of the FOMC meeting and speeches by several Fed members,” Kotak Securities said in a note. ”
(with agency input)
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