Gold price today in India remains weak for 5th day in row, silver rates drop2 min read . Updated: 05 Aug 2021, 10:50 AM IST
- Gold price outlook: The precious metal could be under pressure in the near term, say analysts
Gold struggled for fifth day in a row in India amid rangebound movement in global rates. On MCX, gold futures were down moderately at ₹47,888 per 10 gram, extending losses to about ₹700 per 10 gram in five days. Silver also struggled with futures down 0.1% to ₹67531 per kg. Global gold rates were subdued after the dollar firmed and remarks from a top U.S. Federal Reserve official signaled the possibility of bringing forward policy tightening, says Jigar Trivedi, Research Analyst- Commodities Fundamental, Anand Rathi Shares & Stock Brokers.
In global markets, spot gold prices fell 0.1% to $1,809.96 per ounce while silver was flat at $25.34 per ounce, after hitting a near three-week peak in the previous sessions.
"International Gold rose more than 1% in the previous session after the ADP National Employment Report showed US private payrolls increased far less than expected in July (actual 330K vs exp. 690K vs June 680K). However, the hawkish statements from Fed Vice Chair Richard Clarida pushed the dollar and 10 year bond yield higher from an intraday low point," he added.
Higher interest rates raise the opportunity cost of holding non-interest bearing gold. The dollar index firmed on the hawkish comments, making gold more expensive for holders of other currencies.
For intraday, MCX Gold October future is expected to decline during the session since the dollar has rebounded after Fed Vice-Chair's hawkish statements on rate hike, he said.
Fed Vice Chairman Richard Clarida said that the “necessary conditions for raising the target range for the federal funds rate will have been met by year-end 2022." Clarida also noted he’d be in favor of the Fed making an announcement later this year that it will begin to scale back its bond purchases, in case growth stays strong.
"The bullish comments on the US economy, by Fed Vice Chair Richard Clarida, triggered a rebound in US Treasury yields and turned market attention away from the release of an unexpectedly weak private employment report that had driven the dollar down initially. But, a measure of U.S. services industry activity jumped to a record high in July, boosted by the shift in spending to services and dollar recovered fully. Now, focus is now on U.S. non-farm payroll report, due on Friday. MCX Gold October Future may fall to Rs. 47,750 per 10 gram and MCX Silver September is expected to decline to Rs. 67,200 per kg," he said.
On the lower side, gold was supported by rising fears over Delta variant of coronavirus, say analysts.
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