Gold prices today close to lowest in 11 months, down ₹12,000 from record highs

Gold prices in India edged higher today after a slump in the previous session. On MCX, gold futures were up 0.3% to ₹44,360 per 10 gram, after falling to ₹44,150 in the previous session. Silver futures rose 0.5% to ₹66,202 per 10 gram. Gold rates have fallen to near 11-month lows in India after being in a downtrend since hitting a record high of ₹56,200 in August. And from the start of this year, gold is down about ₹5,500 per 10 gram.

MCX gold has support at ₹43,450 and resistance at ₹44,820, says domestic brokerage Geojit.

In global markets, gold rates edged higher but gains were capped amid a stronger US dollar and higher US Treasury yields. Gold was at $1,687.90 an ounce. Among other precious metals, silver edged higher to $25.12 an ounce while platinum gained 0.1% to $1,136.57. The US benchmark bond yields hovered around a 12-month high on concerns that the government massive stimulus package will stoke inflation.

Higher bond yields increase the opportunity cost of holding gold, which pays no interest. The dollar index also remained near three-month peak. The US House of Representatives is set to take up the Senate version of the coronavirus relief package this week.

Meanwhile, outflows from gold ETFs continued. Holdings of the world's largest gold-backed exchange-traded fund, SPDR Gold Trust, fell 0.5% to 1,063.43 tonnes on Monday from 1,069.26 tonnes on Friday.

"Momentum continue to be on the weaker side as long as prices stay below $1720. Next immediate and strong support is seen at $1660, a direct break of which could extend the bearish momentum in next sessions as well. Immediate turnaround point is seen at $1820," domestic brokerage Geojit said in a note.

Elsewhere, oil fluctuated after Brent crude pulled back below $70 a barrel. Bitcoin traded above $53,000.

Jigar Trivedi, Research Analyst- Commodities Fundamental, Anand Rathi Shares & Stock Brokers on Gold, says gold may draw support at lower levels as the US moves closer to a massive stimulus package.

"Joe Biden is about to mark his first legislative win with the House ready to give final approval to $1.9 trillion Covid-19 relief plan, the second biggest economic stimulus in US history. Moreover, geo-political risk in the Saudi Arabia may provide further support as one of the most protected crude facilities in the world came under attack on Sunday," he said.

Meanwhile, US Fed officials have reiterated that rise in bond yields mostly reflect improvements in the economy and that monetary policy may remain accommodative.

In the near term, gold would be guided by US stimulus talks along with development related to virus spread and vaccination rollout and its impact on US dollar as well as general risk sentiment. (With Agency Inputs)