Gold prices today fall to near lowest of this month, after 5-day decline
- A strong US dollar and firm bond yields have put pressure on international gold rates
Gold prices remained weak today as firm US dollar and higher US bond yields dampened the safe haven appeal of gold. On MCX, gold futures were down for the fifth straight day to near the lowest of this month. They were down 0.25% to ₹51,350 per 10 gram. Silver futures fell 0.6% to ₹55,144 per kg. In global markets, spot gold was down 0.1% at $1,746.06 per ounce, after falling nearly 3% last week. Among other precious metals, spot silver gained 0.2% to $19.06.
“COMEX gold trades lower weighed down by firmness in the US dollar and higher bond yields. The US dollar index trades near mid-July high supported by safe haven buying amid increasing worries about health of European and Chinese economy and largely hawkish comments from Fed officials,"said Ravindra Rao, VP- Head Commodity Research at Kotak Securities.
Gold rates are sensitive to rising US interest rates, as these increase the opportunity cost of holding non-yielding bullion. Gold traders will be focusing on comments by Fed Chair Jerome Powell when he addresses an annual global gathering of central bankers at Jackson Hole, Wyoming, on Friday.
“The key event this week would be the Jackson Hole symposium on Thursday and Friday. Fed Chair Powell will speak the event on Friday. He may use the opportunity to recalibrate market's expectations of Fed's policy path,” IFA Global said in a note.
Meanwhile, the holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, rose 0.32% to 989.01 tonnes on Friday from 985.83 tonnes on Thursday.
"However, supporting gold prices is global growth worries, persisting inflation concerns and geopolitical tensions. ETF inflows showed some buying interest. However, the pace was modest and we need more evidence that investors are re-entering. Gold may remain under pressure as we see shift from riskier assets to safety of the US dollar,” said Ravindra Rao of Kotak Securities.
Sovereign Gold Bonds
Meanwhile, the latest tranche of Govt of India's Sovereign Gold Bond scheme opened for subscription from today. The issue price has been fixed at ₹5,197 per gram of gold while investors who apply online and make payment through digital mode get a discount of ₹50 per gram.
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