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NEW DELHI: Gold and silver future prices rose on Monday tracking the trend in the international market as the passage of a US stimulus bill stoked inflation risks, although a resultant bounce in Treasury yields kept gains in check. Rising Covid cases in India also helped its rise.
Gold is generally considered a hedge against inflation, although higher bond yields have challenged that status recently as they increase the opportunity cost of holding non-yielding bullion.
Gold futures on MCX were up 0.41 per cent or Rs 184 at Rs 44,934 per 10 grams. Silver futures added 0.65 per cent or Rs 432 to Rs 67,276 per kg.
“Gold edged up as the US dollar index and US 10-year bond yield eased marginally amid Treasury Secretary Janet Yellen statement that US inflation risks remain subdued despite the Biden administration stimulus. However, weighing on gold is weaker investor interest and general strength in equity markets. Gold may continue to sway along with the US dollar however a sharp rise is unlikely until yields correct sharply,” said Ravindra Rao – Head – Commodity Research – Kotak Securities
In the spot market, gold in the national capital declined Rs 291 to Rs 44,059 per 10 gram on Friday reflecting fall in international prices of the precious metal and rupee appreciation. Silver also tanked Rs 1,096 to Rs 65,958 per kg.
Trading strategy
“We expect gold prices to trade sideways to up with resistance at $1,740 per ounce and support at $1,700 per ounce. MCX Gold April futures support lies at Rs 44,500 and resistance at Rs 45,200 per 10 gram,” said Tapan Patel, Senior Analyst (Commodities), HDFC Securities.
Global markets
Spot gold rose 0.3 per cent to $1,732.02 per ounce by 0134 GMT, while US gold futures for April delivery rose 0.7 per cent to $1,730.90 per ounce.
SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, said its holdings fell 0.3 per cent to 1,052.07 tonnes on Friday from 1,055.27 tonnes on Thursday.
Hedge funds and money managers slashed their bullish positions in COMEX gold and silver contracts in the week to March 9, data showed on Friday.
Silver rose 0.9 per cent to $26.14, platinum rose 1 per cent to $1,217.37, while palladium fell 0.1 per cent to $2,369.17.