Gold prices today weak for 3rd day, down ₹7000 from record high; silver rates rise
Premium- Analysts say gold rates may remain choppy amid lack of clear cues and continued volatility in US dollar and equity markets
Gold prices in India struggled for third day in a row amid similar trend in global markets. On MCX, gold futures were slightly higher at ₹49,159 per 10 gram while silver rates were 0.2% higher at ₹71,370 per kg. In the previous session, gold had ended flat while silver had dropped 0.8%. Gold has remained choppy after prices hit a near five-month high of ₹49,700 last week. MCX gold has support at 48400-48600 levels and resistance at 49500 levels, say analysts.
In global markets, gold rates remained flat, supported by a fall in US bond yields. Investors remained cautious ahead of US inflation data and the European Central Bank policy meeting, both due later this week. Spot gold was up 0.1% at $1,893.78 per ounce.
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Technically, international gold is trading with marginal sideways and negative bias near $1900 levels and faces resistance at $1912-$1918 levels, say analysts at CapitalVia Investment Advisor.
The US benchmark 10-year Treasury yields fell were near 1.53%, their lowest in more than a month. Lower yields reduce the opportunity cost of holding non-interest bearing gold.
The US consumer price index report is due on Thursday and analysts say that it will provide further clarity on the Federal Reserve's timeline to taper monetary support. On the same day, the ECB is expected to hold its policy meeting on the same day.
Among other precious metals, silver was also flat at $27.63 per ounce while platinum edged 0.1% lower to $1,160.81.
Weighing on gold is weaker investor interest as is evident from recent ETF flows, says Kotak Securities in a note.
"Also weighing on price are concerns about consumer demand in India as virus related restrictions hamper economic activity. Also weighing on price is general improvement in virus situation and progress on vaccination front in US and Europe which has helped ease virus related restrictions."
Analysts say gold may remain choppy amid lack of clear cues and continued volatility in US dollar and equity markets.
"However, the general bias remains positive unless there is a sustained rise in the US dollar," says Kotak Securities. In August last year, gold had hit a record high of ₹56,200 in India.
"Silver has turned choppy along with other commodities amid choppiness in equities and US dollar. The general improvement in outlook for industrial demand is countered by mixed ETF activity and concerns about China’s crackdown on rising raw material prices," the brokerage added. (With Agency Inputs)
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