NEW DELHI: Gold prices were trading flat on Wednesday, steadying near a one-week low hit in the previous session, following a spike in US bond yield.
The US Treasury yields strengthened to two-year highs on expectations of quicker interest rate hikes by the Federal Reserve.
Gold futures on MCX were up 0.06 per cent or Rs 31 at Rs 47,948 per 10 grams. Silver futures jumped 0.09 per cent or Rs 56 to Rs 63,075 per kg.
Gold is considered an inflationary hedge, but the metal is highly sensitive to rising US interest rates, which increase the opportunity cost of holding non-interest bearing bullion.
Ravindra Rao, CMT, EPAT, VP- Head Commodity Research at Kotak Securities said gold trades in a range as support from inflation concerns, rising virus spread and geopolitical issues are countered by higher US and global bond yields, firmness in US dollar and lack of ETF buying.
“Gold continues to trade in a broadrange and this may continue with mixed factors in place, however, higher yields may keep pressure on prices,” he added.
Physical gold buying faltered in India last week, as prices climbed and rising coronavirus cases prompted consumers to postpone purchases, while demand in top consumer China stabilised ahead of new year festivities.
In the spot market, the highest purity gold was sold at Rs 48,122 per 10 grams while silver was priced at Rs 61,602 per kg on Tuesday, according to the Indian Bullion and Jewellers Association.
The spot prices of gold have remained flat for more than one week, whereas Silver has remained below Rs 62,000 for about three weeks now.
Gold prices on Comex are trading flat, pressured by higher US treasury yields, as investors looked for clues about the Federal Reserve’s interest rate hike timeline from its policy meeting next week, said Ravi Singh, Vice President and Head of Research, ShareIndia.
“Gold in MCX is hovering near its resistance of 48000 levels, most probable to give an upper breakout,” Singh added with an advice to buy about Rs 48,000 for the target of Rs 48,500 and sell below Rs 47,700 for the target of Rs 47,500.
Spot gold was little changed at $1,813.04 per ounce by 0118 GMT, after falling to a one-week low of $1,805 an ounce on Tuesday. US gold futures were steady at $1,813.30.
Spot silver was steady at $23.44 an ounce, platinum was down 0.3 per cent to $978.49, and palladium was little changed at $1,896.83.