Domestic gold prices eased on Tuesday following two consecutive sessions of gains as a rising dollar made the yellow metal more expensive for those dealing in other currencies.

MCX gold futures for June 4 delivery were last seen quoting at Rs 47,079 per 10 grams, down by Rs 240 or 0.51 per cent from their previous close, having cooled down off to as low as Rs 47,025 earlier in the day.

The contract for August 5 delivery traded down by Rs 222 or 0.47 per cent at Rs 47,420.

Silver followed suit with the July 5 contract on the bourse quoting Rs 104 or 0.15 per cent lower at Rs 70,796 per kilogram.

Globally, spot gold declined as much as 0.63 per cent to $1,781.63 per ounce and silver 0.70 per cent to $26.70 per ounce.

Federal Reserve Chairman Jerome Powell’s comments on Monday that the US economy is doing better but is not out of the woods yet rendered gold somewhat less attractive, say analysts.

The US central bank wants to keep monetary policy loose for the foreseeable future, but the economic recovery gaining pace has fanned speculation of a pull-back in support sooner than expected.

Back home, a third day of losses on Dalal Street arrested the fall in precious metals. A selloff in financial stocks, especially private lenders, sent the benchmark indices tumbling almost 1 per cent each.

Typically, precious metals share an inverse relationship with equities with any gains in stocks boosting the risk appetite of investors, moving them away from safe havens such as gold, and vice versa.

Meanwhile, spot gold and silver of 99.9 per cent purity stood at Rs 46,968 per 10 grams and Rs 70,120 per kilogram, excluding GST, in opening deals on Tuesday, according to Mumbai-based industry body IBJA.

The dollar index – which gauges the greenback against six major peers overseas – was seen almost at its intraday high of 91.37 at the last count, up 0.49 per cent on the day.


What analysts say

“Optimism about US economic growth weighed on the metal’s safe-haven appeal,” said Navneet Damani, VP-Commodities Research, Motilal Oswal Financial Services. He expects gold on COMEX to move in a broader range of $1,773-1,820 per ounce and on MCX at Rs 47,000-47,700 per 10 grams in the near term.


Technical outlook

“MCX gold finds support at Rs 47,100-46,880 and resistance at Rs 47,550-47,700, and silver at Rs 70,400-69,800 and Rs 71,400-71,900, respectively,” said Manoj Kumar Jain, Director-Head of Commodity Research, Prithvi Finmart.

He suggests buying gold around Rs 47,100 for a target of Rs 47,600 with a stop loss At Rs 46,880 and silver around Rs 70,400 for a target of Rs 71,600 with a stop loss at Rs 69,800.

Markets participants will closely track data on services activity and employment from the US due this week for clues.