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Gold and silver prices in India struggled today amid weak global cues. On MCX, gold futures declined to near two-week lows of 50,510 per 10 gram. Silver futures were marginally higher at 59,510 per kg.  In global markets, gold rates were flat at $1,824.72 per ounce and remained on course for their second straight weekly decline. So far this week, gold prices have dropped about 0.9%, on worries of aggressive rate hikes by global central banks to counter runaway inflation. Among other precious metals, spot silver rose 0.4% to $21.02 per ounce but is set for weekly loss.

“Recovery upticks in gold can be seen as long as the support of $1815 remains undisturbed. A direct drop below the same would trigger further weakness," domestic brokerage Geojit said in a note. 

For silver, “expect a choppy trade inside $22.50-20.50 levels and breaking any of the sides would suggest fresh directional moves," the brokerage added. 

Benchmark US 10-year Treasury yields firmed today, limiting demand for safe-haven gold. Higher interest rates and bond yields raise the opportunity cost of holding bullion, which yields no interest.

A strong dollar makes greenback-priced gold more expensive for buyers holding other currencies.  Inflows into gold ETFs have been mixed recently. The holdings of SPDR Gold Trust,the world's largest gold-backed exchange-traded fund, fell 0.81% to 1,063.07 tonnes on Thursday from 1,071.77 tonnes a day earlier.

Gold has been has been trading in the range of US$ 1810-1875 for the past one month. “Gold is trading in a narrow range due to two reasons - the persistent inflationary pressures, and the rising rates," says Emkay Wealth Management.

“Inflation has become a key risk to growth for economies across the globe. Historically, gold prices tend to gain during phases of high inflation but there is a reason that is restricting the gains for gold. The stubborn and sticky inflation has forced central banks across the globe to hike rates aggressively and unwind the easy monetary policy to reverse the excess liquidity in the system. The Fed has turned more aggressive based on persistently high inflation numbers. This has rendered strength to the US Dollar, and the currency yields are rising too with hike in policy rates," the wealth management firm added. 

Emkay expects gold prices to trade in narrow range until clarity in the US on interest and other monetary policy measures. “The support levels for gold is at 1760 and 1730 levels, and the upside may be capped at 1930/40 levels in the near term," it added. 

 

 

 

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