Gold prices today slipped below the key ₹45,000 level in Indian markets while silver rates tumbled amid weak global cues. On MCX, gold futures dipped 0.1% to ₹44981 per 10 gram while silver futures slumped 1.4% to ₹66,562 per kg.
Why did gold prices fall today?
In global markets, gold today edged lower amid a strong dollar and hardening US bond yields. Spot gold fell 0.3% to $1,739.78 an ounce while other precious metals like silver, platinum and palladium all retreated.
Gold is likely to remain choppy with negative bias till prices stay below the support of $1760, says Geojit. “Meanwhile, major downside momentum is seen only if it breaks below $1660. A direct break of $1760 recovery upticks would trigger and it may take prices towards $1820,” the brokerage said.
MCX gold has support at ₹44,680 while faces resistance at ₹46,200.
The US 10-year bond yields held near the highest level in more than a year, weighing on the precious metal which doesn’t offer interest.
What does the House Financial Services Committee do?
Gold traders will be watching comments from Fed chief Jerome Powell and Treasury Secretary Janet Yellen who are expected to make their first joint appearance before the US House Financial Services committee.
So far this year gold has seen a price drop of 8% this year as investors shifted to riskier assets on hopes of faster global economic recovery. Meanwhile, Federal Reserve Chair Jerome Powell, told Wall Street Journal the United States would pull out of the crisis “stronger and better, as we have done so often before.”
In Indian markets, gold prices are now down about ₹5,000 from the start of this year and as compared to last August’s record high levels of ₹56,000 they are off about ₹11,000.
However, gold has seen some support at lower levels. The precious metal is seen as a hedge against inflation. The holdings of SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund or gold ETF, rose 0.3% to 1,051.78 tonnes on Friday from 1,048.28 tonnes on Thursday.
Back in India, latest commerce ministry data suggests that gold imports fell 3.3% to $26.11 billion during April-February 2020-21. Imports of the yellow metal stood at $27 billion in April-February 2019-20. India is one of the largest importers of gold, which mainly caters to the demand of the jewellery industry. In volume terms, the country imports 800-900 tonnes of gold annually.