Gold prices were under pressure for the sixth straight day in Indian markets as global rates remained subdued amid firm US dollar and bond yields. On MCX, gold futures were down 0.44% to ₹52,030 per 10 gram while silver futures slumped 1.3% to ₹65,745 per kg. In six days, gold has so far fallen about ₹1,600 per 10 gram.
In international markets, gold languished near two-week lows amid elevated US dollar and firm bond yields. Spot gold was down 0.1% at $1,928.08 per ounce, the lowest since April 7. The dollar index edged higher to 101.265, making gold less attractive for buyers holding other currencies. Among other precious metals, spot silver dipped 0.2% to $24.10 per ounce, platinum eased 0.2% to $928.77, and palladium fell 2.3% to $2,319.78.
Firm US dollar and bond yields are weighing on gold amid signs of faster policy tightening by the Federal Reserve, says Rahul Kalantri, VP Commodities, Mehta Equities Ltd.
On the other hand, he says, higher global inflation prospects and slower economic growth outlook due to Russia-Ukraine crisis and higher inflation is supporting precious metals at lower levels. Gold is seen as a safe store of value during economic and political crises.
“We expect some more weakness in gold price in today’s session. Gold has support at $1917-1905, while resistance at $1940-1948. Silver has support at $23.80-23.62, while resistance is at $24.34-24.55. In rupee terms, gold has support at ₹51,920–51,770, while resistance is at ₹52,420–52,550. Silver has support at ₹66,050- 65,710 while resistance is at ₹66,890–67,270,” Kalantri added.
The US 10-year Treasury yields, however, were off recent highs, limiting losses in zero-yield gold. China’s worsening Covid situation amplified concerns about a slowdown in demand in the world’s second-largest economy. And the country’s covid-zero policy is spooking investors worried about disruptions to the global supply chain and demand. The US dollar extended advance as investors opted for safe havens.
China concerns also impacted oil prices which fell below $100 a barrel.
Gold has been under pressure as traders bet that the US Fed will go for bigger in subsequent months after Chair Jerome Powell endorsed a 50 basis-point increase next month. Though the Ukraine crisis continues to weigh on risk sentiment, gold is highly sensitive to rising US short-term interest rates and higher yields, which increase the opportunity cost of holding non-yielding bullion. (With Agency Inputs)