Heightened concerns about inflation had driven US bond yields sharply higher, putting pressure on asset classes like equities and gold
Gold in Indian markets could not sustain early gains and again dipped below the ₹45,000 level while silver was also off highs. Gold futures rose to ₹45,299 in early trade before dipping to near ₹44,800. Silver rates were up 0.6% to ₹67,638 per kg after hitting ₹68,470 at day's high. In global markets, gold slid 1% today, retreating from a more than two-week high as rising US Treasury yields and a stronger dollar dented demand for the safe-haven metal.
Spot gold was down 0.9% to $1,728.51 an ounce after touching its highest since March 1 at $1,755.25 in the session.
Analysts say the main headwind for gold right now is surging bond yields. The benchmark U.S. 10-year Treasury yield rose to 1.74% for the first time since January 2020, while the dollar gained 0.3% against its rivals. Higher interest rates increase the opportunity cost of holding the non-yielding bullion and weigh on the dollar.
"Technically, international gold is trading with sideways to bearish momentum, where resistance is at $1755-$1765 levels. On the domestic front MCX Gold April opened on a positive note but is trading with bearish momentum since the noon session. Support levels may be expected in the range of ₹44,880-44750. Major resistance is at 45300-45600," said Kshitij Purohit of CapitalVia Investment Advisors.
Overnight, the S&P 500 hit a record as Fed Chairman Jerome Powell reiterated the central bank’s tolerant stance on inflation and the recent rise in bond yields.
Analysts say that Fed's emphasis on continued policy support reassured the markets. Heightened concerns about inflation have driven bond yields sharply higher, putting pressure on asset classes like equities and gold. The precious metal has fallen sharply from its August highs of ₹56,200.
Gold traders will also be watching monetary policy decision of Bank of Japan and Bank of England, both due later this week. (With Agency Inputs)