Gold rate today: Yellow metal losses sheen; silver slips below Rs 63,000

NEW DELHI: Gold prices dropped on Wednesday as higher US Treasury yields weighed on sentiments for the yellow metal and investors awaited the Federal Reserve monetary policy outcome.

While gold is seen as an inflation hedge, higher short-term US interest rates and bond yields tend to increase the opportunity cost of holding non-yield bullion.

Gold futures on MCX dropped 0.38 per cent or Rs 195 down at Rs 50,613 per 10 gram. However, silver futures were trading lower by 0.27 per cent or Rs 173 at Rs 62,876 per kg.

Bullion prices are likely to remain volatile ahead of the US Federal Reserve policy meeting outcome. It is seen as a safe store of value during times of economic and political crises.

The bulls are trying to stop the bleeding in down-trending markets that have been punished by a strong US dollar and rising bond yields, said Rahul Kalantri, VP Commodities, Mehta Equities.

“However, weakness in the US bond yields, prolonged lockdowns in China and possible drawdown in global economic growth are supporting precious metals,” he added.

In the spot market, highest purity gold was sold at Rs 51,336 per 10 gram while silver was priced at Rs 62,950 per kg on Monday, according to the Indian Bullion and Jewellers Association.

The spot prices of gold have dropped about Rs 2,300 per 10 gram in the last two weeks, whereas silver has tumbled almost Rs ,7200 per kg in the same period under review.

Gold is showing profit booking on account of gains in the US bond yield and strength in the dollar, said Ravi Singh, Vice President and Head of Research, ShareIndia.

“However, gains in global energy prices and downbeat US data released last week supported precious metals. Gold prices may show some more correction this week,” he added.

Trading strategy
“We expect gold prices to trade sideways to down with COMEX spot gold support at $1,850 and resistance at $1,890 per ounce. MCX Gold June support lies at Rs 50,500 and resistance at Rs 51,200 per 10 gram,” said Tapan Patel, Senior Analyst (Commodities), HDFC Securities.

Global markets
Spot gold was down 0.3 per cent at $1,862.48 per ounce, as of 0217 GMT. US gold futures fell 0.4 per cent to $1,82.40.

Spot silver dipped 0.1 per cent to $22.54 per ounce, while platinum was nearly unchanged at $961.62, and palladium gained 0.2 per cent to $2,260.28.

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