Gold prices today tumble to lowest in 10 months, down ₹11,000 from record high

Gold prices in India today struggled near 10-month lows amid weak global cues. On MCX, gold futures were down 1.3% to ₹44960 per 10 gram, their sixth day of decline in previous seven days. Silver futures were down 1.8% at ₹67,970 per kg. Gold is in a sideways trend and MCX gold faces resistance at ₹45600-45800 levels, says Kshitij Purohit, Lead – International & Commodity at CapitalVia Advisor.

Gold prices are now down ₹11,000 from August highs of ₹56,200.

In global markets, gold prices edged lower today as firm US Treasury yields exerted pressure on non-yielding bullion. Spot gold eased 0.2% at $1,734.16 per ounce. Benchmark U.S. Treasury yields after a sharp fall last week held near 1.4% levels, making non-interest paying gold unattractive to investors.

“A rally in global equities on economic optimism and strengthening of US dollar continue to hit the safe-haven status of gold and thus the price of the commodity. Meanwhile, hopes of fiscal stimulus measures from the U.S offer lower-level support to the metal,” said Hareesh V, Research Head Commodities at Geojit Financial Services.

“Sentiment will continue to be on the lower side as long as it stays below the support of $1760. However, a direct turn above $1820 is required to negate the view and take prices higher,” he added.

Among other precious metals, silver dipped 0.3% to $26.67 an ounce, while palladium climbed 0.6% at $2,376.50. Platinum shed 0.3% to $1,200.50.

“The US and global bond yields have risen sharply in last few days and while central banks have played down higher yields as reflection of economic optimism, market players are worried about inflation and rising borrowing costs. The US 10-year bond yield hit a Feb.2020 high of near 1.61% last week but has steadied near 1.4% currently,” Kotak Securities said in a note.

The Senate will begin debate over the $1.9 trillion US stimulus bill, which was passed by the House of Representatives last week.

Here are some other key events that would be in gold traders’ radar this week: US Federal Reserve Beige Book is due on Wednesday while oil producers group will meet on Thursday. Also on Thursday, data on US factory orders, initial jobless claims and durable goods orders will be released and on Friday, US employment report.

Asian stocks were steady Wednesday after an overnight retreat on Wall Street amid concerns about excessive investor optimism.

Back in India, the latest tranche in Sovereign Gold Bonds 2020-21 (Series XII) is currently open for subscription. The issue price for sovereign gold bonds has been fixed at ₹4,662 per gram and the issue will close on 5th March. Investors applying online and making payment online will get a discount of ₹50 per gram and for them the issue price will be ₹4,612.

Source: Mint