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NEW DELHI: Gold prices dropped on Wednesday, thanks to the firm US dollar and higher bond yields. However, the bullion remained range-bound.
Investors awaited fresh cues from top central banks on their monetary policy plans, especially from the US Federal Reserve. Fed chair Jerome Powell will testify before the US Congress this week.
Gold futures on
were trading lower, down almost 0.34 per cent or Rs 173 at Rs 50,587 per 10 grams. Meanwhile, silver futures plunged about 1.27 per cent or Rs 781 at Rs 60,490 per kg.
The dollar strengthened towards recent two-decade peaks, making greenback-priced bullion more expensive for buyers holding other currencies.
Pritam Patnaik, Head – Commodities, Axis Securities said gold has come under pressure ahead of Fed Chair Jerome Powell’s key testimony this week. A strong dollar and rising bond yields have dented the sentiments for the yellow metal.
“The Fed has indicated that they are looking at raising interest rates by as much as 1.25 per cent in the next couple of months, 75 basis points in July and 50 basis points in September,” he added. “This makes things very difficult for gold bulls.”
In the spot market, the highest purity gold was sold at Rs 50,914 per 10 grams while silver was priced at Rs 61,077 per kg on Tuesday, according to the Indian Bullion and Jewellers Association.
The spot prices of gold breached Rs 51,000 per 10 grams after two sessions, while silver advanced more than Rs 1,100 in the last one week.
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“We expect gold prices to trade sideways to down for the day with COMEX Spot gold support at $1,810 and resistance at $1,840 per ounce. MCX Gold August futures support lies at Rs 50,200 and resistance at Rs 51,000 per 10 grams,” said Tapan Patel, Senior Analyst (Commodities),
Securities.
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Spot gold fell 0.3 per cent to $1,827.03 per ounce, extending losses to a fourth straight session. US gold futures dropped 0.6 per cent to $1,828.10.
Spot silver dipped 1 per cent to $21.45 per ounce, platinum fell 0.7 per cent to $930.91, and palladium dropped 0.8 per cent to $1,862.40.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)