The rise in US bond yields has weighed on gold which doesn’t offer interest
A stronger US dollar also weighed on the precious metal
Gold and silver today fell in Indian markets, tracking similar trend in global markets. On MCX, gold futures were down 0.1% to ₹44,904 per 10 gram while silver slumped 1% to ₹67,100 per kg. In the previous session, gold had edged 0.3% higher amid volatile trade while silver rose 0.7%. MCX gold has near-term resistance at Rs. 45200/45600 per 10 gram while support at 44100 per 10 gram, says HDFC Securities.
In global markets, gold fell today as bond yields surged and the US dollar rebounded. Spot gold today fell 0.4% to $1,730.06 an ounce, after dropping 0.5% on the previous today. The yield on the US 10-year Treasury note has risen past 1.75% level for the first time in 14 months. The rise in bond yields has weighed on bullion which doesn’t offer interest. The dollar index was up at 91.882, making gold expensive for non-holders of the US currency.
"Expect choppy with negative bias trading initially as prices stay below $1745. Meanwhile major downside momentum is seen only if it breaks below $1660. Further upticks are seen only a break of $1760," Geojit said in a note.
Silver and platinum both retreated in global markets. Silver fell 0.6% to $25.89 and platinum was down 0.7% at $1,198.19.
The Bank of Japan today in its policy decision widened the amount of movement it allows for 10-year government bond yields to fluctuate around its 0% target, specifying a range of 25 basis points. It added it would focus ETF purchases on the Topix index. Gold traders will also be monitoring the first high-level talks between the U.S. and China since President Joe Biden took office.
Weighing on gold price is also weaker investor interest as is evident from ETF outflows, say Kotak Securities in a note. The brokerage says that the yellow metal could remain under pressure as US bond yields are at elevated levels while ETF buyers remain unconvinced by recent price gains.
Elsewhere, among other commodities, oil today tumbled for sixth day in a row on growing worries about rising COVID-19 cases in Europe as several large economies have had to reimpose lockdowns. A rally in the dollar, which was supported by higher U.S. bond yields, also pressured oil prices, as a stronger dollar makes oil more expensive for holders of other currencies.