NEW DELHI: Following global markets and a firm dollar, gold prices inched lower on Thursday in the domestic market. Investors moved to the sidelines ahead of a US payrolls report that is expected to provide clues on the Federal Reserve’s tapering timeline.
Gold futures on MCX eased 0.11 per cent or Rs 53 at Rs 46,854 per 10 gram. On the other hand, silver futures were marginally up by 0.04 per cent or Rs 25 at Rs 61,028 per kg.
The yellow metal was tepid in the previous session, supported by a fall in US bond yields and weak global indices over inflation worries. Gold prices may get some support from higher input cost and inflation concerns along with weaker dollar.
Reduced stimulus and higher interest rates lift bond yields, translating into increased opportunity costs of holding bullion that pays no interest.
Ravi Singh, Vice President & Head of Research, ShareIndia said, “The higher US Treasury yields on the expectations of rising inflation and expectation of sooner Fed tapering is weighing heavily on gold prices. Attention is turning towards the US jobs data to decide the next direction in gold price.”
In the spot market, highest purity gold was sold at Rs 46,845 per 10 gram while silver was priced at Rs 60,584 per kg on Monday, according to the Indian Bullion and Jewellers Association.
The spot price of the yellow metal has inched higher compared to the previous day, whereas silver has declined about Rs 400 per kg during the period under review.
Trading Strategy
“We expect gold prices to trade sideways to up for the day with COMEX Spot gold support at $1,740 and resistance at $1,770 per ounce. MCX Gold December support lies at Rs 46,700 and resistance at Rs 47,100 per 10 gram,” said Tapan Patel, Senior Analyst (Commodities), HDFC Securities.
Global markets
Spot gold was flat at $1,761.36 per ounce by 0118 GMT, while U.S. gold futures were little changed at $1,763.10.
Spot silver was unchanged at $22.59 per ounce, platinum fell 0.2% to $982.01, and palladium rose 0.6% to $1,899.73.