NEW DELHI: Following global trends, gold was trading lower on Thursday. A strong US dollar weighed on the sentiments, whereas investors awaited a policy decision by the European Central Bank (ECB) due later in the day.
Gold futures on MCX were down 0.25 per cent, or Rs 118, at Rs 46,920 per 10 gram. Silver futures declined 0.39 per cent, or Rs 253, at Rs 63,930 per kg.
“The yellow metal traded under pressure due to a stronger dollar and hawkish Fed’s stance. The comments from the New York Federal President on early tapering of stimulus triggered selling in gold,” said Tapan Patel, Senior Analyst (Commodities), HDFC Securities.
The dollar was buoyed by a cautious risk sentiment, denting the bullion’s appeal for those holding other currencies. Non-yielding gold tends to gain in a low interest-rate environment.
Ravindra Rao, CMT, EPAT, VP- Head Commodity Research at Kotak Securities, said gold corrected sharply from recent highs amid gains in US dollar, higher bond yields and sharp rise in Chinese equities.
“However, supporting price is geopolitical tensions, persisting virus risks and uneven global economic recovery and cautious stance of major central banks. Gold has come off recent highs amid dollar gains however growth worries and cautious tone of central banks may continue to support prices,” he added.
Despite a higher gold import in August, the physical gold demand in India has remained tepid. Domestic dealers are hopeful of an upcoming festival season to bring in more customers.
In the spot market, highest purity gold was sold at Rs 47,203 per 10 gram while silver was priced at Rs 64,449 per kg on Tuesday, according to the Indian Bullion and Jewellers Association.
The spot price of the yellow metal has declined marginally in the last one week, whereas silver has gained more than Rs 1,500 per kg during the period under review.
After poor US employment data, treasury yield jumped as the market is anticipating that the Fed can continue to tolerate rising inflation in the near run, said Sandeep Matta, Founder TRADEIT Investment Advisor.
The World Platinum Investment Council (WPIC) said it now expects the global platinum market to be in surplus this year as mine supply ramps up and investment demand falls.
“We expect gold prices to trade sideways to down for the day with COMEX spot gold support at $1,770 and resistance at $1,800 per ounce. MCX Gold October support lies at Rs 46,800 and resistance at Rs 47,300 per 10 gram,” said Patel of HDFC Securities.
Spot gold was unchanged at $1,789.39 per ounce by 0054 GMT, after touching its lowest level since Aug 26 at $1,781.30 in the previous session. US gold futures eased 0.1% to $1,790.80.
Platinum dropped 0.4% to $975.78 per ounce while silver fell 0.1% to $23.94. Palladium eased 0.2% to $2,245.89. Prices fell to their lowest level since Feb 2 at $2,213.95 on Wednesday.