Gold rate today falls for first time in 5 days, silver price slips

Market


Gold prices slipped today after the recent upmove as stronger US dollar weighed on the precious metal. On MCX, gold futures dipped to 48,265 per 10 gram after a four-day rising streak. Silver futures slipped to 64,507 per kg. 

In global markets, spot gold fell 0.4% to $1,823.84 per ounce as the dollar firmed and yields rose ahead of US inflation data. Among other precious metals, spot silver fell 0.6% to $24.13 per ounce, platinum declined 0.6% to $1,052.75 per ounce, and palladium dipped 0.04% to $2,020.26 per ounce.

“Upticks likely to continue only if gold breaks $1830. Else, there are chances of corrective selling. Anyhow, a direct drop below $1750 is a weak signal,” says Geojit in a report. 

For silver, “a direct break of $25 is needed to continue rallies. Else, there are chances of corrective selling pressure,” the brokerage added. 

A stronger-than-expected reading in US consumer prices could be a headwind for gold, say analysts. Gold has been hovering around three-month high over the past few sessions after assurances from key central banks last week that interest rates would remain low for the time being. 

Low rates reduce the opportunity cost of holding gold, which yields no interest.

“Bullion traders had their finger crossed yesterday betting on breakout of $1834 which had been strong resistance for last 4 months and thrice it has failed to breach this level, make or break situation will be inflation data expected in the evening today from US, says Vidit Garg, director, MyGoldKart.

A rise in US bond yields also put pressure on gold. The dollar today gained 0.34% against its rivals, making gold expensive to holders of other currencies.

Domestic brokerage Axis Securities has a neutral stance on gold and recommends a ‘buy-on-dips’ strategy. “In the recent FOMC meeting, the tone of Fed was slightly dovish and the US central bank signalled to reduce bond purchase by $15 billlion/month. Any number larger than $15 billion/month will be considered an aggressive stance. This decision has brought some cool-off in bond yields and put upward pressure on the gold. However, gold will continue to be a preferred asset class until the uncertainties over the economic recovery fade off and will continue to attract investments as a proven hedge against other asset classes,” it said. (With Agency Inputs)

 

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