Benchmark 10-year US Treasury yields extended their decline on Tuesday after pulling back from the highest level in 3.5 years in the previous session, lifting prices of zero-yield gold for now.
Gold futures on
were up 0.01 per cent or Rs 7 at Rs 50,966 per 10 grams. However, silver futures were trading higher by 0.41 per cent or Rs 253 at Rs 61,750 per kg.
While gold is seen as a safe store of value during times of political and economic crises, it is highly sensitive to rising short-term US interest rates, which raise the opportunity cost of holding bullion.
In the spot market, the highest purity gold was sold at Rs 51,479 per 10 grams while silver was priced at Rs 61,361 per kg on Monday, according to the Indian Bullion and Jewellers Association.
The spot prices of gold have dropped about Rs 600 per 10 grams in less than two weeks, whereas silver has plunged close to Rs 4,000 per kg in the same period under review.
Higher US yields and a firmer dollar have pushed gold to lower levels, said Ravi Singh, Vice President and Head of Research, ShareIndia. “Due to the untamed inflation, hopes of policy tightening in near future is building pressure on gold prices,” he added.
“We expect gold prices to trade sideways to down for the day with COMEX Spot gold support at $1,850 and resistance at $1,872 per ounce. MCX Gold June futures support lies at Rs 50,700 and resistance at Rs 51,300 per 10 gram,” said Tapan Patel, Senior Analyst (Commodities),
Spot gold was up 0.2 per cent at $1,856.75 per ounce, as of 0213 GMT. US gold futures were down 0.3 per cent at $1,853.90.
Spot silver gained 0.4 per cent to $21.87 per ounce, while
dipped 0.1 per cent to $954.98, and palladium rose 0.5 per cent to $2,107.80.