The dollar index was languishing near a one-month low against its rivals, making gold less expensive for other currency holders. Benchmark US 10-year Treasury yields edged lower towards multi-weeks low touched last week. Lower bond yields reduce the opportunity cost of holding non-interest bearing gold.
Gold futures on MCX were up 0.10 per cent or Rs 47 at Rs 47,400 per 10 grams. Silver futures dropped 0.63 per cent or Rs 430 to Rs 68,254 per kg.
“Gold weakened as the US dollar index steadied after recent fall. Also weighing on price is general progress on the vaccination front and optimism about the US and Chinese economy and continuing ETF outflows. However, supporting price is the loose monetary policy stance of major central banks and rising virus concerns,” said Ravindra Rao, VP- Head Commodity Research at Kotak Securities.
“Gold has rallied sharply in the last few days and stability in the US dollar has made it vulnerable to some profit taking however the general trend is still positive.”
In the spot market, gold prices rose marginally by Rs 9 to Rs 46,431 per 10 gram in the national capital on Friday. Silver also gained Rs 53 to Rs 67,460 per kg.
Trading strategy
“We expect gold prices to trade sideways to up for the day with COMEX gold support at $1,760 and resistance at $1,785/$1,800 per ounce. MCX Gold June support lies at Rs 47,000 and resistance at Rs 47,600 per 10 gram,” said Tapan Patel, Senior Analyst (Commodities), HDFC Securities.
Global markets
Spot gold was up 0.1 per cent at $1,777.33 per ounce by 0238 GMT, after hitting its highest since Feb.25 at $1,783.55 on Friday. U.S. gold futures edged 0.2 per cent lower to $1,777.
Silver fell 0.6 per cent to $25.81 per ounce after hitting a near one-month high in the last session. Palladium eased 0.3 per cent to $2,766.91, while platinum was steady at $1,203.61.
