Gold falls to near 10-month lows, down over Rs 11,000 from August highs; silver gains - Kashmir Student Alerts

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Thursday, 4 March 2021

Gold falls to near 10-month lows, down over Rs 11,000 from August highs; silver gains

Gold falls to near 10-month lows, down over Rs 11,000 from August highs; silver gains

New Delhi: Gold prices in India fell on Thursday tracking weakness in the global market. On MCX, the yellow metal fell to a 10-month low. Gold April Futures made a low of Rs 44,712 per 10 grams today, down over Rs 11,000 from its August high of Rs 56,200.

However, silver prices witnessed some rebound today. On MCX, Silver March futures rose nearly 0.40% to Rs 66,450 per kg.

Experts say gold is likely to trade sideways for some more days before witnessing a rebound. At present, the precious metal faces resistance at around Rs 45,600 level.

In global markets, gold prices edged lower after US Treasury yields rose, putting pressure on non-yielding assets such as gold and silver. Spot gold fell to a low of $1,704.55 per ounce. Benchmark U.S. Treasury yields after a sharp fall last week settled at 1.47% on Wednesday, making non-interest paying gold unattractive to investors.

Analysts say a rally in global equities on economic optimism and strengthening of US dollar continue to hit the safe-haven status of gold and thus the price of the commodity. As per experts technically gold will remain weak as long as it stays below $1,760.

Typically, stronger dollar and Treasury yields have an inverse correlation with gold. Looking forward, an acceleration in the pace of the vaccinations and the additional fiscal aid expected in the US have raised prospects of an economic recovery, which is likely to continue weighing on bullions. Recent strength in the dollar has been attributed to positive updates regarding the US stimulus package.

File Photo - KSA

Analysts say the present correction in the yellow metal offers an opportunity to buy gold for with a medium-term perspective. "From a medium term perspective, we believe $1,700 on the Comex are good entry points from a 6-12 months’ perspective targeting $1,850-1,890. On the domestic front, Rs 45,500-45,000 are levels to buy targeting Rs 49,000-49,800 in the medium term," Navneet Damani, Vice President- Commodity Research, Motilal Oswal Financial Services mentioned in a note.