The US 10-year Treasury yield rose as much as 1.776 per cent on Tuesday, its highest since Jan. 22. Higher returns on bonds increase the opportunity cost of holding a non-yielding bullion.
Gold futures on MCX were down 0.31 per cent or Rs 139 at Rs 44,284 per 10 grams. Silver futures dipped 0.75 per cent or Rs 474 to Rs 62,650 per kg.
“Gold is pressurized by firmness in the US dollar and US bond yields, weaker ETF interest, upbeat Chinese economic data and general progress on the vaccine front. Rising virus cases and Fed’s dovish stance has failed to lend much support. Gold is likely to remain under pressure unless there is a sharp correction in US dollar or bond yields,” said Ravindra Rao, VP- Head Commodity Research at Kotak Securities.
In the spot market, gold dipped by Rs 138 to Rs 44,113 per 10 gram in the national capital on Tuesday amid decline in global precious metal prices. Silver also shed Rs 320 to Rs 63,212 per kg.
“We expect gold prices to trade down for the day with COMEX gold support at $1,650 and resistance at $1,700 per ounce. MCX Gold June futures capped the downside on sharp rupee depreciation while support lies at Rs 44,200 and resistance at Rs 44,700 per 10 gram,” said Tapan Patel, Senior Analyst (Commodities), HDFC Securities.
Spot gold was down 0.1 per cent to $1,683.56 per ounce by 0129 GMT. US gold futures were flat at $1,685.10 per ounce.
SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, said its holdings rose 0.1 per cent to 1,037.50 tonnes on Monday from 1,036.62 tonnes on Friday.
Silver was steady at $24.01, while platinum rose 0.5 per cent to $1,160.05 and palladium was up 0.7 per cent at $2,607.04.