US Treasury yields held near multi-year highs following strong labor market data and hawkish comments from Federal Reserve officials, dampening the appeal for zero-yield bullion.
Gold futures on
were trading lower by 0.33 per cent or Rs 163 at Rs 49,980 per 10 grams. However, silver futures declined by 0.50 per cent or Rs 283 to Rs 56,370 per kg.
Gold is considered a hedge against inflation but higher interest rates increase the opportunity cost of holding the bullion, which yields nothing.
ICICIDirect Research said that gold prices dropped on Thursday amid a continuous rise in US 10-year treasury yields. Bullion prices were pressured by a drop in initial jobless claims from the US. “Gold prices are expected to trade with a positive bias for the day amid weakness in the US dollar index,” it added. “Silver prices are likely to take cues from the gold movement.”
Physical gold buying improved in India last week as prices cooled down ahead of the Dhanteras and Diwali festivals later this month, while Chinese premiums remained elevated amid robust demand.
Swiss gold exports to top markets — China and India — increased in September, while shipments to Turkey rose to the highest since April 2013, Swiss customs data showed.
In the spot market, the highest purity gold was sold at Rs 50,228 per 10 grams while silver was priced at Rs 56,267 per kg on Thursday, according to the Indian Bullion and Jewelers Association.
The spot prices of gold have eased more than Rs 1,600 in the last two months, whereas the silver in the spot market has eased about Rs 4,500 per kg during the same period under review.
Trading Strategy “Gold has support at $1,640-1,628, while resistance is at $1,662-1,674. Silver has support at $18.20-17.90, while resistance is at $18.82-18.99,” said Rahul Kalantri, VP Commodities, Mehta Equities.
“In rupee terms, gold has support at Rs 49,910-49,740, while resistance is at Rs 50,340-50,580. Silver has support at Rs 55,880-55,310, while resistance is at Rs 56,980-57,510,” he added.
Global markets Spot gold was flat at $1,627.20 per ounce, as of 0118 GMT, and lost 0.8 per cent so far for the week. US gold futures were down 0.4 per cent at $1,630.10.
Spot silver eased 0.2 per cent to $18.63 per ounce, platinum fell 0.4 per cent to $910.30 and palladium dropped 1.4 per cent to $2,028.43.
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