NEW DELHI: Gold prices retreated from its four and half month high on Thursday, hurt by an uptick in the US dollar and bond yields, while investors awaited key economic readings out of the United States this week. Domestic markets, too, witnessed a muted trade.

The dollar index rose to a one-week high against rivals, making gold more expensive for other currency holders. Benchmark US Treasury yields rose to 1.58 per cent, increasing the opportunity cost of holding non-interest bearing gold.

Market participants now await the monthly US personal consumption report due on Friday to gauge inflationary pressure. US gross domestic product, jobless claims data are due later on Thursday.

Investors at home are buying precious metal and gold ETFs ahead of an uncertain economic environment in the wake of the second wave of coronavirus. The second tranche of the sovereign gold bond scheme 2021-22 is available for subscription.

Gold futures on MCX were unchanged at Rs 48,783 per 10 grams. Silver futures were marginally down by 0.07 per cent or Rs 50 to Rs 71,361 per kg.

“COMEX gold trades 0.4 per cent lower near $1893/oz after a 0.2 per cent gain yesterday. Gold has corrected from January high levels amid some recovery in US dollar and profit taking by ETF investors,” Ravindra Rao, CMT, EPATVP-Head Commodity Research, Kotak Securities.

In the spot market, highest purity gold was sold at Rs 49,195 while silver was priced at Rs 71,866 on Wednesday, according to the Indian Bullion and Jeweller’s Association.

“However, supporting the prices is choppiness in equity markets, loose monetary policy stance of major central banks and China’s efforts to limit raw material prices. Gold has rallied sharply in last few days and is now seeing some profit taking which may extend if the US dollar recovers further or if equity markets stabilize.”

Trading strategy

“We expect gold prices to trade sideways to up for the day with COMEX Spot gold support at $1876 and resistance at $1920 per ounce. MCX Gold June futures support lies at Rs 48300 and resistance at Rs 49000 per 10 gram,” said Tapan Patel, Senior Analyst (Commodities), HDFC Securities.

Global markets

Spot gold was down 0.1 per cent at $1,894.88 per ounce by 0235 GMT, after hitting its highest since Jan 8 at $1,912.50 on Wednesday. US gold futures declined 0.3 per cent to $1,898 per ounce.

Palladium fell 0.4 per cent to $2,734.57 per ounce, silver slipped 0.5 per cent to $27.56 and platinum dipped 0.4 per cent to $1,185.99.

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