NEW DELHI: Gold prices inched lower on Wednesday in the domestic market, following global cues. A firmer dollar and rise in Treasury yields weighed on the precious metal’s appeal.
Investors focused on US non-farm payrolls data due later this week, which would be crucial to the Federal Reserve’s timeline for tapering economic support.
Gold futures on MCX eased 0.25 per cent, or Rs 115, to Rs 46,641 per 10 gram. Also, silver futures were down by 0.44 per cent, or Rs 271, at Rs 60,715 per kg.
The yellow metal witnessed selling with a stronger dollar and rise in US bond yields. The US Treasury yields rose pushing gold prices down. However, inflation worries over rise in energy cost capped downside in gold prices.
Gold is often viewed as an inflation hedge, but reduced central bank stimulus and interest rate hikes tend to push government bond yields up, translating into a higher opportunity cost for holding gold that pays no interest.
Ravi Singh, Vice President & Head of Research, ShareIndia, said, “Gold prices fell marginally yesterday amid range-bound trading. It may trade between Rs 46,500 and Rs 46,850 with a little upward bias today. India imported 91 tonnes of gold in September, compared to 12 tonnes a year earlier.”
In the spot market, highest purity gold was sold at Rs 46,682 per 10 gram while silver was priced at Rs 60,905 per kg on Monday, according to the Indian Bullion and Jewellers Association.
The spot price of the yellow metal has added about Rs 850 in the last one week, whereas silver gained about Rs 1,300 during the period to around Rs 61,000 mark.
Sandeep Matta, Founder, TRADEIT Investment Advisor, said gold on MCX is also operating in a small range under pressure. The outlook is positive and market participants should look for buying opportunities at lower levels of the range.
Trading strategy
“We expect gold prices to trade sideways to down 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 46,500 and resistance at Rs 47,000 per 10 gram,” said Tapan Patel, Senior Analyst (Commodities), HDFC Securities.
Global markets
Spot gold fell 0.1% to $1,758.06 per ounce by 0108 GMT, while U.S. gold futures were 0.1% lower at $1,758.40.
Spot silver fell 0.4% to $22.57 per ounce, platinum eased 0.2% to $960.11, and palladium dropped 0.3% to $1,908.14.