NEW DELHI: Gold and silver futures were trading with cuts on Wednesday pulled down by firmer US Treasury yields with investors looking out for policy cues from the Federal Reserve’s meeting, while palladium eased after hitting a record peak in the previous session.
Benchmark US 10-year Treasury yields rose to their highest since April 15, increasing the opportunity cost of holding non-yielding bullion. The dollar index rose 0.1 per cent against its rivals, making gold less appealing for other currency holders.
Gold futures on MCX were down 0.39 per cent or Rs 186 at Rs 47,117 per 10 grams. Silver futures dropped 1.04 per cent or Rs 730 to Rs 69,470 per kg.
“Gold weakened today as the US dollar and bond yields inched up ahead of the Fed decision later today. Also weighing on price is weaker investor interest and concerns about consumer demand in India. However, supporting price is rising virus cases and loose monetary policy stance of major central banks,” said Ravindra Rao, VP-Head Commodity Research, Kotak Securities.
“Gold may remain choppy ahead of Fed decision, however, we do not expect a sustained decline as Fed is most likely to reaffirm its dovish stance.”
In the spot market, gold prices in the national capital on Monday fell Rs 81 to Rs 46,976 per 10 gram due to rupee appreciation. Silver also dipped Rs 984 to Rs 67,987 per kg.
Trading strategy
“We expect gold prices to trade sideways to down for the day with COMEX gold support at $1,755 and resistance at $1,795 per ounce. MCX Gold June futures support lies at Rs 46,800 and resistance at Rs 47,600 per 10 gram,” said Tapan Patel, Senior Analyst (Commodities), HDFC Securities.
Global markets
Spot gold was down 0.5 per cent at $1,767.76 per ounce by 0131 GMT. U.S. gold futures were down 0.5 per cent at $1,770.00 per ounce.
Palladium fell 0.6 per cent to $2,924.12 per ounce, after hitting an all-time high of $2,962.50 on Tuesday. Silver fell 0.9 per cent to $26.00 per ounce. Platinum was down 1 per cent at $1,216.75.