NEW DELHI: Gold prices dropped on Wednesday, bucking the firm global trend, with futures on MCX trading lower by 0.31 per cent or Rs 158 at Rs 50,170 per 10 grams.
The safe-haven demand was offset by a rise in US treasury yields. Higher yields and interest rate hikes dent the appeal of bullion by raising the opportunity cost of holding non-interest paying gold.
Silver futures were trading down 0.23 per cent or Rs 145 at Rs 64,200 per kg.
Ravindra Rao, CMT, EPAT, VP- Head Commodity Research, Kotak Securities said that gold eased back from a recent high as market reaction to Russia-Ukraine tensions subsided given the western reaction to Russia’s troop movement was not seen much.
“ETF investors also moved to sidelines,” he added. “We may see volatile trade as market players react to development relating to Russia, however, the general bias remains positive as geopolitical tensions are unlikely to subside soon.”
In the spot market, the highest purity gold was sold at Rs 50,131 per 10 grams while silver was priced at Rs 64,372 per kg on Tuesday, according to the Indian Bullion and Jewellers Association.
The spot prices of gold have jumped about Rs 1,700 in the last two weeks, whereas silver has advanced more than Rs 3,000 per kg as the white metal topped Rs 64,000 mark in the spot market.
Trading strategy
“We expect gold prices to trade sideways to up for the day with COMEX Spot gold support at $1,890 and resistance at $1,920 per ounce. MCX Gold April support lies at Rs 50,100 and resistance at Rs 50,800 per 10 gram,” said Tapan Patel, Senior Analyst (Commodities), HDFC Securities.
Global markets
Spot gold was little changed at $1,898.63 per ounce, as of 0147 GMT, after scaling its highest since June 1 at $1,913.89 per ounce on Tuesday. US gold futures shed 0.3 per cent to $1,901.90.
Spot silver was up 0.2 per cent at $24.13 per ounce, platinum was flat at $1,075.75 and palladium rose 0.3 per cent to $2,353.69.