Gold rates today struggle to move higher, down ₹8,000 from record highs

Gold rates in India today struggled to move higher amid flat global cues. On MCX, gold futures were up 0.14% to ₹48,126 per 10 gram while silver edged 0.07% lower at ₹61,785 per kg.  In global markets, gold inched higher despite a risk-on rally in equity markets. A dip in US bond yields from their recent highs supported the precious metal, reducing the opportunity cost. 

As the year 2021 winds down, gold is down about ₹2,000 per 10 gram on a year to date basis, after hitting a record high of ₹56,200 in August last year. 

Spot gold rose 0.1% to $1,785.48 per ounce as US benchmark 10-year and 30-year Treasury yields pulled back from their one-week highs hit on Tuesday. If gold sustains and closes above $1,798 then bears may have tough time in coming days while move below $1,785 will bring it down till $1,767, says Vidit Garg, director at MyGoldKart.

Among other precious metals, spot silver rose 0.2% to $22.51 an ounce while platinum gained 0.3% to $954.26.

“Spot silver is showing resistance around $22.60. If bulls needs to come back then they have to get closing above $22.65,” he added.

Gold traders will be looking ahead to key US inflation data that could give further clues into Fed's tapering stance. The U.S. Consumer Price Index (CPI) report is due on Friday.

Reduced stimulus and interest rate hikes tend to push government bond yields up, raising the opportunity cost of non-interest bearing gold. 

“Gold may remain choppy as market players debate Fed’s monetary stance amid rising inflation and persisting growth worries. However, stability in US dollar amid possibility of Fed’s monetary tightening may keep pressure on prices,” Kotak Securities said in a note.

“However, supporting gold price is rising virus concerns amid spread of the new variant, increasing inflationary pressure, concerns about China’s economic health especially property sector and increased geopolitical tensions,” the brokerage added.

Silver price outlook

“Silver has faced the brunt of mixed trade in gold and industrial metals in last few days however price seems to have stalled near $22/oz. The gold silver ratio has also stalled near 80 levels and a correction may result in silver’s outperformance. Weighing on silver price are concerns about Chinese economy, Fed’s monetary tightening expectations and persisting stress in manufacturing sector,” Kotak Securities said in a note.

(With Agency Inputs)