BackGold price today: Rates decline on rising dollar, bond yields; what should be your strategy for bullion today?
Gold prices traded lower in the domestic futures market, mirroring the global trend, as the US dollar and Treasury yields jumped amid prospects of higher interest rates.
PremiumGold prices traded lower in morning trade in the domestic futures market on Wednesday, mirroring the global trend, as the US dollar and Treasury yields jumped amid prospects of interest rates staying higher for an extended period.
"Gold prices traded near their weakest levels in more than a month on Wednesday, beaten down by an assurgent US dollar as markets made adjustments to a rising interest rate scenario," reported Reuters.
Holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, touched a more than four-year low, as reported by Reuters.
In the case of low-interest rates, the opportunity cost of holding gold is also lower, making gold more attractive. When interest rates go higher, they make other interest-bearing investments such as bonds more appealing.
Besides, the dollar's movement is a key factor that influences gold prices. As gold is priced in dollars, its strength is negative for the yellow metal. A stronger dollar can put downward pressure on gold prices and vice versa. If the Fed remains hawkish in the coming months, it may add more strength to the dollar which could be a negative factor for gold prices.
MCX Gold for the October 5 series traded 0.32 per cent lower at ₹58,245 per 10 grams around 10:45 am.
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What should be your strategy for bullion today?
Experts expect gold prices to remain weak and see some volatility today due to rising dollar, and bond yields amid the prospects of interest rates going further higher.
Rahul Kalantri, VP of commodities at Mehta Equities expects gold and silver to remain volatile in today’s session.
"Gold has support at $1,890-1,879 while resistance is at $1,917-1,928. Silver has support at $22.65-22.52, while resistance is at $23-23.15 In the Indian rupee terms, gold has support at ₹58,250, 58,080 while resistance is at ₹58,580, ₹58,750. Silver has support at ₹71,100-70,550, while resistance is at ₹72,240–72,750," said Kalantri.
Manoj Kumar Jain of Prithvifinmart Commodity Research also expects gold and silver to remain volatile this week amid strength in the dollar index and US bond yields.
"Gold has support at $1,910-1,896, while resistance at $1,934-1,945 per troy ounce. Silver has support at $23-22.84, while resistance is at $23.40-23.66 per troy ounce. On the MCX, gold has support at ₹58,300-58,080 and resistance at ₹58,550-55,8720 while silver has support at ₹71,250-70,700 and resistance at ₹72,200-72,650," said Jain.
Jain suggests selling silver around ₹71,900 with a stop loss of ₹72,400 for the target of ₹70,950.
Brokerage firm ICICI Direct believes spot gold may slip to the $1,880 level as long as it sustains below $1,910 (200-day EMA) levels amid a firm dollar.
"MCX Gold prices are likely to move south towards ₹58,250 level as long as it trades below the resistance level of ₹58,750 level. MCX Silver is expected to follow gold prices and move lower towards ₹71,200 level as long as it sustains below ₹72,350 level," said ICICI Direct.
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Disclaimer: The views and recommendations above are those of individual analysts, experts and broking companies, not of Mint. We advise investors to check with certified experts before making any investment decisions.
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