BackGold prices today fall for second day in a row, silver rates slump
Gold may see bouts of profit-taking if rally in equity markets continue, says analysts though they maintain positive outlook on the precious metal
PremiumGold prices in India dipped today for second day in a row despite positive global cues. On MCX, gold futures fell 0.12% to ₹48,250 per 10 gram while silver future slumped 0.9% to ₹72,540 per kg. In international markets, gold prices were flat near a four-month high, ahead of the release of minutes from the US Federal Reserve's last policy meeting. Gold traders are likely to look for more clues on policymakers' view on inflation.
MCX gold has support at ₹46360 and resistance at ₹49,400, say analysts.
Spot gold in global markets was flat at $1,866.54 per ounce after hitting $1,874.80 in the previous session. The Fed minutes due later today may offer more insight into how policy makers view price pressures, and any hints of a timeline for tapering stimulus.
Technically, "breaking the important resistance of $1880 is required to continue the positive momentum towards $1925 or more. Else, there are chances of corrective selling but major downside turnaround point is placed at $1805," says Geojit.
The US dollar index was flat near a three-month low against its rivals, making gold less expensive for other currency holders.
In global markets, gold rates have risen more than 10% after falling to a nine-month low in early March. A retreat in US dollar and inflation expectations has supported the rebound in gold. Concerns over rising inflation intensified after U.S. consumer prices in April rose 4.2% on-year, the fastest increase in more than a decade even though Fed officials have repeatedly maintained they expect any rise in inflation to be short-lived. Gold is often seen as a hedge against inflation.
Among other precious metals, silver today fell 1% to $27.93 per ounce while platinum eased 0.3% to $1,215.
The rebound in gold has also been helped by resumption of inflows into bullion-backed exchange-traded funds or gold ETFs.
Many analysts still maintain a positive outlook on gold amid easy monetary policy stances by central banks across the world.
"Gold may continue to trade with a positive bias as US dollar may remain under pressure on Fed’s dovish stance however any strong recovery in equity markets may make it vulnerable to profit-taking," Kotak Securities said in a note.
"However, weighing on gold price is improving virus situation in US and Europe which has helped authorities to ease virus related restrictions. Also weighing on price is concerns about consumer demand in India as virus related restrictions hampers economic activity," the brokerage said.
(With Agency Inputs)
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