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NEW DELHI: Gold prices traded marginally lower in the domestic markets on Monday, bucking the firm global trend, amid a rise in US treasury yields. That said, a surge in Omicron cases across the globe capped the downside.
Gold futures on MCX slipped 0.19 per cent or Rs 49 to Rs 48,056 per 10 grams. Silver was down 0.37 per cent or Rs 230 at Rs 62,430 per kg.
Worldwide infections hit a record high over the past seven-day period, with an average of just over a million cases detected a day between in the last one week of 2021, according to Reuters data.
Meanwhile, benchmark 10-year Treasuries ended 2021 with the largest yield increase since 2013. Higher yields raise the opportunity cost of holding non-interest paying gold.
Gold trades in a range as support from safe-haven buying on the back of rising virus concerns and stress in China’s property market is countered by gains in the US dollar index, said Ravindra Rao, CMT, EPAT, VP- Head Commodity Research at Kotak Securities.
“Gold has broken past the recent range of $1780-1820/oz reflecting strong upward momentum, however, it may struggle to build momentum if the US dollar recovers further,” he added.
Gold discounts in India widened to the highest level in five months in the last week of 2021 as consumers in major Asian countries held back purchases into the year-end holidays amid new virus-related restrictions.
In the spot market, the highest purity gold was sold at Rs 48,083 per 10 grams while silver was priced at Rs 61,979 per kg on Friday, according to the Indian Bullion and Jewellers Association.
The spot prices of gold ended in 2021 below the Rs 48,000 mark, whereas silver slipped below Rs 62,000 levels during the final trade of the previous year. The billions have remained flat over the last one month.
Trading strategy
“Gold prices are trading in a tight range and low volatility. The consolidation and technical setup is suggesting a bullish run is pending in the near term. The momentum indicators on the daily chart are indicating a possible buying surge in gold prices,” said Ravi Singh, Vice President & Head of Research, ShareIndia.
He has suggested buying gold above Rs 48,200 for the target of Rs 48,500, whereas one can short the bullion below Rs 47,900 for the target of Rs 47,600.
Global markets
Spot gold remained mostly unchanged at $1,830.09 per ounce by 0058 GMT, after hitting a more than one-month high of $1,831.49 during the session. US gold futures were up 0.1% to $1,830.30.
Spot silver shed 0.2 per cent to $23.23 an ounce, platinum gained 0.8 per cent to $970.27, and palladium rose 0.6 per cent to $1,903.39.