Yellow metal gains marginally; silver holds Rs 67,000 mark

Yellow metal gains marginally; silver holds Rs 67,000 mark

NEW DELHI: Gold prices bucked the weak global trend to rise marginally in early trade on Friday but the upside remained capped amid firm US Treasury yields and a stronger dollar. The yellow metal, meanwhile, was headed for its first weekly losses in three.

Gold futures on MCX added 0.16 per cent or Rs 86 to Rs 52,499 per 10 grams. However, silver futures were trading marginally lower by 0.07 per cent or Rs 45 at Rs 67,080 per kg.

Ravindra Rao, CMT, EPAT, VP- Head Commodity Research, Kotak Securies said that gold is trading in a narrow range as support from renewed weakness in equies, growth worries, inflaon concerns and geopolical tensions is countered by the monetary ghtening stance of the Fed and other central banks.

"ETF oulows also show profit taking by investors. Gold has stabilized aer recent losses and mixed factors may keep the price in a range, however, the prospect of Fed's ghtening may keep pressure on price," he added.

In the spot market, the highest purity gold was sold at Rs 52,540 per 10 grams while silver was priced at Rs 67,330 per kg on Thursday, according to the Indian Bullion and Jewellers Associaon.

The spot prices of gold have dropped almost Rs 1,110 per 10 grams in the last four sessions, whereas Silver has tumbled about Rs 2,800 per kg in the same period of review.

Ravi Singh, Vice President and Head of Research, ShareIndia said that gold may remain rangebound as safe-haven demand stemming from the Ukraine crisis and its potenal impact on the global economy will get countered by a stronger dollar and a rise in yields.

Echoing similar views, PritamPatnaik, Head - Commodies, Axis Securies said that in the short term it's difficult to chart a bullish strategy for gold. It's expected to trade in a ght range, he said.

Trading strategy

Rahul Kalantri, VP Commodies, Mehta Equies said gold has support at $1,934-1,922, while resistance at $1962-1972. Silver has support at $24.200-23.88, while resistance is at $24.74-25.05.

"In rupee terms, gold has support at Rs 52,220–52,050, while resistance is at Rs 52,650–52,820. Silver has support at Rs 66,550- 66,270 while resistance is at Rs 67,710–68,120," he added.

Global markets

Spot gold was down 0.1 per cent at $1,949.33 per ounce, as of 0242 GMT. US gold futures were up 0.2 per cent at $1,952. Gold is down about 1.3 per cent so far this week.

Spot silver fell 0.6 per cent to $24.50 per ounce, and planum eased 0.2 per cent to $966.56, with both poised for weekly dips. Palladium rose 0.4 per cent to $2,431.69.

Gold prices nudge lower as US treasury yields

Spot gold was down 0.4% at $1,950.61 per ounce, as of 0502 GMT. U.S. gold futures were down 0.1% at $1,953.00

Gold prices eased on Thursday as a rebound in U.S. Treasury yields tempered bullion's safehaven demand stemming from the Ukraine crisis and its potenal impact on the global economy.

Spot gold was down 0.4% at $1,950.61 per ounce, as of 0502 GMT. U.S. gold futures were down 0.1% at $1,953.00.

Benchmark U.S. 10-year Treasury yields firmed aer they fell from three-year highs on Wednesday.

U.S. bond yields have marched higher on expectaons that the Federal Reserve will aggressively hike interest rates as inflaon accelerates at its fastest pace in 40 years.

Gold is highly sensive to rising short-term U.S. interest rates and higher yields, which increase the opportunity cost of holding zero-yield bullion.

"As the crical level of $2,000 wasn't broken, people have probably decided to take profits... and move funds out to equies or even short-term treasury bills," said Brian Lan, managing director at dealer GoldSilver Central.

Lan said gold would look to consolidate in the near-term and is currently doing so at around $1,940-$1,960 per ounce. Earlier this week, gold came within striking distance of the key $2,000 level as concerns around the Russia-Ukraine conflict and rising inflaonary pressures increased safe-haven bids.

"Geopolical risk and inflaon pressure are currently the two primary drivers for the gold market. An aggressive Fed rate hike of 75 bps could be a short-term price damper, while elevated inflaon due to supply shocks could migate the negave impact," ANZ research said in a note.

The dollar also strengthened aer dropping in the previous session, making greenback-priced gold less aracve for other currency holders.

Spot gold may test a resistance at $1,961 per ounce, a break above which could lead to a gain to $1,975, according to Reuters technical analyst Wang Tao.

Spot silver dipped 0.6% to $25.07 per ounce, planum dropped 0.7% to $980.00, and palladium slipped 0.8% to 2,431.81.

Content by : R. Reena