Gold prices today fall to near lowest in 2 months, silver down at multi-year low
Premium- Gold rates today: A strong US dollar has put pressure on precious metals, including silver
Gold and silver prices remained weak today in Indian market amid a weak global trend in precious metals. On MCX, the yellow metal futures today fell 0.4% to near two-month low of ₹50,200 per 10 gram while silver tumbled to multi-year low of ₹52,395 per kg. In global markets, gold fell to six-week low amid a firm US dollar. The yellow metal was down 0.3% to $1,706.31 an ounce as the dollar index rose 0.29% to 108.983. The US bond yields also rose on expectations of the US Federal Reserve continuing with its aggressive policy stance.
Though the gold is typically seen as a hedge against inflation, higher interest rates increase the opportunity cost of holding non-yielding bullion and boosts the dollar.
“Gold trades near 6-week low amid persistent strength in the US dollar and bond yields on back of hawkish comments from Fed officials despite mixed economic data. Also weighing on price are concerns about health of Chinese economy which may hamper consumer demand. ETF outflows also show weaker investor interest. Gold has corrected sharply from recent highs and is now near the key $1700/oz level however we may see weakness continuing unless there is a substantial correction in the US dollar and bond yields," said Ravindra Rao, VP- Head Commodity Research at Kotak Securities.
Despite the recent dip in gold prices, investor interest remained weak. The holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, said its holdings fell 0.3% to 973.37 tonnes on Wednesday.
Among other precious metals, spot silver in global markets dropped 0.8% to $17.83 per ounce after falling to a more than two-year low.
Gold, silver technical outlook
“Bullion prices retreated sharply and silver prices slipped below two-year lows on Wednesday, weighed down by strengthening dollar index and bond yields on expectations of more rate hikes to fight inflation. Fundamentals remain negative for the metal, while bearish technical studies add to the weak structure," said Rahul Kalantri, VP Commodities, Mehta Equities Ltd.
“However, due to oversold conditions, some amount of consolidation could be seen in the yellow metal going ahead. The Euro zone inflation hit a record 9.1% in August and, hence the ECB could also start raising interest rates to control inflation. However, the U.S. ADP non-farm employment data released on Wednesday was below expectations and supported gold prices at lower levels."
“Gold has support at $1698-1684, while resistance is at $1722-1735. Silver has support at $17.55-17.40, while resistance is at $18.25-18.42. In rupee terms gold has support at ₹50,050–49,840, while resistance is at ₹50,520–50,740. Silver has support at ₹52,550-52,120, while resistance is at ₹53,580–53,910."
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