Gold prices today fall after hitting 2-week high, silver rates rise
Premium- Analysts say that inflation worries have supported gold rates on the downside while growing expectations for US Federal Reserve interest rate hikes have kept gains in check.
Gold prices in India edged lower but remained near two-week high amid firm global rates. On MCX, gold futures were down at 0.03% to ₹48,415 per 10 gram while silver rose 0.3% to ₹62,559 per kg. In international markets, gold hovered near two-week high of $1,827.37 per ounce ahead of a US inflation data release scheduled this week.
Gains were capped as elevated US Treasury yields kept bullion's gains in check. Among other precious metals, silver rose 0.4% to $23.27 per ounce, while platinum fell 0.2% to $1,030.08.
“Despite of highest US 10-year bond yields in two years, gold bounced to $1,829 yesterday as inflation concerns and Russia Ukraine tensions lift demand. Technically $1,820 and $1,814 holds an important support on intraday charts hence any move below these levels will bring bears into play, " said Vidit Garg, director of MyGoldKart.
“RSI is near to 70 levels and while ADX at 40 signals that still little ignite to upside is left. On the upside resistance holds at $1,837 as dollar index and rising bond yields will continue to limit the gains," he added.
Gold prices have been stuck in a range so far this year. Analysts say that inflation worries have supported bullion on the downside while growing expectations for US Federal Reserve interest rate hikes have kept gains in check.
“Gold is supported by volatile equities, ETF inflows, geopolitical tensions and inflation concerns however higher bond yields and gains in US dollar index has limited upside. Gold may remain in a range near $1800/oz amid mixed factors however increasing monetary tightening expectations may limit upside," said Ravindra Rao, VP- Head Commodity Research at Kotak Securities.
US inflation data for January is due on Thursday and after last week's robust labour data expectations are rising of faster policy tightening by the US central bank.
Gold is often typically considered a hedge against inflation but rate hike raise the opportunity cost of holding non-yielding bullion.
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Holdings in the SPDR Gold Trust GLD, the world's largest gold-backed exchange-traded fund, rose 0.4% on Tuesday, data showed. (With Agency Inputs)
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