NEW DELHI: Gold prices were trading flat with a negative bias on Tuesday as a firmer dollar and US Treasury yields weighed on the bullion’s appeal.
A stronger dollar raises gold’s costs to buyers holding other currencies, while higher yields increase bullion’s opportunity cost.
Gold futures on MCX were down 0.09 per cent or Rs 43 at Rs 47,871 per 10 grams. Silver futures dipped 0.12 per cent or Rs 76 at Rs 61,194 per kg.
Ravi Singh, Vice President & Head of Research, ShareIndia said that the new variant Omicron has put a brake on the gold wedding demand till further clarity on the severity of the variant and its outbreak emerges.
“Gold prices are trading on cues from international rates. The traders are weighing more on the early tapering by Fed after data suggested the labour market was rapidly tightening, pushing gold to choppy zone,” he said.
The prices will remain in up trend this week and short covering may be seen at dips, Singh said adding that the recent hawkish stance of the Fed, however, is holding back the breakout in gold.
Physical gold demand has eased in India and other major Asian hubs recently. The wedding season is also coming to a halt.
In the spot market, the highest purity gold was sold at Rs 47,875 per 10 grams while silver was priced at Rs 60,992 per kg on Monday, according to the Indian Bullion and Jewellers Association.
The spot price of gold has declined about Rs 1,700 per 10 grams in the last three weeks, whereas silver has declined about Rs 6,000 per kg during the period under review.
“We expect gold prices to trade sideways to down with COMEX Spot gold support at $1,770 and resistance at $1,790 per ounce. MCX Gold February support lies at Rs 47,500 and resistance at Rs 48,100 per 10 grams,” said Tapan Patel, Senior Analyst (Commodities), HDFC Securities.
Spot gold was little changed at $1,778.79 per ounce by 0130 GMT. U.S. gold futures were flat at $1,780.00.
Spot silver fell 0.2 per cent to $22.31 an ounce. Platinum was steady at $938.00 and palladium dropped 0.3 per cent to $1,849.19.