Gold was trading lower in India on March 5, tracking a downtrend in international markets. On the Multi-Commodity Exchange (MCX), the April gold contracts were trading at Rs 44,291 per 10 grams, down Rs 250, or 0.56 percent, at 1005 hours. May silver futures fell 0.83 percent, or Rs 550, to Rs 65,371 per kg.
The rising US dollar on higher bond yields and increasing hope of US economic recovery weighed on sentiment in the bullion market.
"Gold remains pressurised by firmness in the US dollar on the back of higher bond yields, optimism about the US economy and safe-haven buying. Also weighing on the gold price is continuing ETF outflows," Ravindra Rao, VP- Head Commodity Research at Kotak Securities told Moneycontrol.
However, supporting price is the progress on US stimulus and loose monetary policy stance of major central banks, he added.
"Gold may remain under pressure unless US bond yields correct or we see concrete measures on US stimulus," Rao said.
Catch live updates on gold here
The US 10-year yield topped 1.5 percent, while the dollar surged to a three-month high, a Reuters report said.
International spot gold and silver prices extended losses on March 5 morning in Asian trade as the 10-year benchmark and the dollar continued to remain firm.
COMEX gold was trading 0.7 percent lower at $1,688.80 an ounce and tested the lowest level since June 2020 at $1,688.96 an ounce, while silver was down 0.89 percent at $25.23 per ounce.
Investors are now waiting for Us' non-farm payrolls data expected later in the day.
On March 4, international gold and silver prices crashed, pressured by gains in the dollar and US treasury yields after Federal Reserve Chair Jerome Powell signalled no immediate move to address the surge in bond yields, experts said.
The dollar index, a measure of the value of American currency against a basket of six global currencies, traded at 91.70 at the time of publishing this copy against the previous day's close of 91.63. On March 4, it rallied sharply from 90.95, the previous day's closing.
Powell repeated his pledge to keep credit loose and flowing until Americans are back to work, rebutting investors who have openly doubted he can stick to that promise once the pandemic passes and the economy surges on its own.
While Powell said the increase in bond yields was notable and caught his attention, he did not consider it a disorderly move, or one that pushed long-term rates so high the Fed might have to intervene in markets more forcefully to bring them down, such as by increasing its $120 billion in monthly bond purchases.
Currently, the Federal Reserve is buying $80 billion in treasuries.
Technically, LBMA spot gold was trading below $1,700 level and would continue its bearish momentum up to $1,685-$1,671 levels, while the resistance is at $1,705-$1,716 levels, said Sriram Iyer.
"LBMA silver spot will continue to trade on a negative note up to $24.90-$24.25 levels. Resistance is at $26.10-27.05 levels," he added.
MCX April gold could witness a downside pressure up to Rs 44,100 per 10 grams, while the resistance was at Rs 44,670-44,845, Iyer said.
MCX May silver could further pull prices up to Rs 65,100-64,300 a kg. The resistance is at Rs 66,400-67,230, he said.