Gold prices today fall to lowest in 10 months, down ₹12000 from record highs2 min read . Updated: 05 Mar 2021, 04:07 PM IST
- Gold rates have fallen in eight out of past nine days
- The precious metal has fallen to lowest in over 10 months
Gold suffered further losses today amid weak global cues. On MCX, gold futures were down 0.44% to ₹44344 per 10 gram in its eighth day of decline in past nine sessions that has taken prices to more than 10-month lows. Silver futures were down 0.4% to ₹65635 per kg. In global markets, gold continued its downward trend with prices declining 0.2% to $1,693.79 per ounce.
The precious metal is down more than 2% this week amid a hardening of US bond yields and a stronger US dollar. Higher yields increase the opportunity cost of holding bullion, which pays no interest. Among other precious metals, silver rose 0.2% to $25.35 an ounce, but was down 5% for the week so far.
Gold may remain under pressure as long as prices stay below the support of $1760, Geojit said in a note. "Immediate downside targets are seen at $1670 followed by $1620. A direct turn above $1820 is required to negate the view and take prices higher," the brokerage said.
MCX gold has support at ₹43,880 and resistance at ₹46,450, Geojit said.
The benchmark US 10-year yield topped 1.5% after Fed chief Jerome Powell on Thursday said inflation will likely pick up in the coming months. Investors are increasingly worried ultra-loose monetary policies of central banks - a key pillar of a year-long equity surge - will be wound down to deal with an expected spike in prices.
He however cautioned that the increase will be temporary, and won’t be enough for the Fed to alter its low-interest rate policies.
Powell also reiterated that the Fed would not tighten its policies until its goals of full employment and consistently high inflation had been met, and that was likely to be some time away.
The Fed chief said the central bank was ready to step in when needed but traders were left disappointed that he did not indicate the bank would act on the rise in yields such as increasing its bond purchases.
Despite the recent fall in gold prices that has taken the precious metal ₹12,000 lower than its August highs of ₹56,200, many analysts remain positive on the precious metal.
"We assume that central banks will eventually rein in the yields with their asset purchases and also help their respective governments in keeping the borrowing costs low. On gold price trajectory, we still remain bullish considering the unprecedented government stimulus, bloated Central bank balance sheets and burgeoning sovereign debt," said Hitesh Jain of Yes Securities.
Meanwhile, outflows from gold ETFs continued, putting further pressure on gold. The amount of gold held by exchange traded funds fell by 84.7 tonnes worth $4.6 billion in February, the World Gold Council (WGC) said. Also, the holdings of the world's largest gold-backed exchange-traded fund, SPDR Gold Trust fell 0.4% on Thursday. (With Agency Inputs)
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