Gold Prices Continue To Fall Following International Trend
Gold prices in India
On the comments, the US Treasury yield surged to 1.5 percent and also dollar moved higher to 3-month highs. And this increase in yield, weighed down gold prices.
For the week after recoding levels of $1693 per ounce levels, gold prices have seen a decline of over 2% so far, marking third straight weekly fall for the yellow metal.
Gold ETFs see huge outflow in February
As yields climbed and investors lost interest in the metal, which loses its sheen as the opportunity cost of holding non-yielding bullion increases, there was seen redemption in the instrument to the extent of 84.7 tonnes worth $4.6 billion.
Inflation and demand owing to lower prices may support gold prices in the medium term
Jigar Trivedi, Research Analyst- Commodities Fundamental, Anand Rathi Shares & Stock Brokers said, "MCX gold has declined for yet another session as the rising 10Y bond yield (1.45%) & DXY above 91 has hurt the sentiment these days. On MCX gold is down by approx. 2% now this week. The SPDR Gold ETF has witnessed liquidation for the 12th straight session. Comex gold has crucial support of $1,700. Focus is on Fed Chair Powell's virtual speech tonight for more cues. The trend is bearish but it's a good level to start accumulating. There is further pain in price but jewellery demand will provide support around Rs 44,600 - Rs 44,400."
Also, as inflationary concerns continue to linger, with no good hedge available, the sheen in the yellow metal as restores as it is deemed as an inflationary hedge.
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