NEW DELHI: Gold prices on Tuesday fell for the third straight day as a stronger dollar dented the safe haven metal’s appeal. The yellow metal remained tepid in domestic markets as well, following negative global cues.
Gold futures on Multi Commodity Exchange (MCX) were down by 0.51 per cent, or Rs 51, at Rs 48,472 per 10 grams. Silver futures shed 0.80 per cent, or Rs 575, to Rs 71,304 per kg.
The strengthening US dollar is weighing on gold prices. The greenback strengthened by 0.1 per cent to hover close to a one-month high against its counterparts, making gold more expensive for other currency holders.
Investors are also waiting for the outcome of the Fed’s two-day policy meeting due on Wednesday. Economists are expecting for the much-anticipated taper announcement to come in the next quarter, despite a patchy recovery in the job market. US monthly retail sales data is due late in the day, and will also be on the radar.
The demand for physical gold crumbled in India, the world’s second largest bullion market. Shops are not yet fully open in the country and dealers are still forced to offer discounts.
In the spot market, highest purity gold was sold at Rs 48,345 while silver was priced at Rs 71,340 on Monday, according to the Indian Bullion and Jewellers Association.
“COMEX gold trades marginally lower near $1864/oz after a 0.7 per cent decline yesterday. Gold remains pressurized by recovery in US bond yields as market players position for Fed decision. ETF investors also moved to sidelines,” Ravindra Rao, CMT, EPAT, VP-Head Commodity Research, Kotak Securities.
“However, supporting prices are choppy equities, rising inflation concerns and persisting virus concerns. Gold has already corrected sharply in anticipation of the Fed’s hawkish stance, so we may see range-bound and a choppy trade ahead of the decision.”
“We expect gold prices to trade sideways to up for the day with COMEX gold support at $1848 and resistance at $1880 per ounce. MCX Gold August support lies at Rs 48100 and resistance at Rs 48800 per 10 gram,” said Tapan Patel, Senior Analyst (Commodities), HDFC Securities.
Spot gold was down 0.2 per cent at $1,861.96 per ounce, as of 0224 GMT, after falling to its lowest since May 17 at $1,843.99 on Monday. US gold futures eased 0.1 per cent to $1,863.10.
Silver dropped 0.7 per cent to $27.64 per ounce, palladium was steady at $2,749.66, and platinum slipped 0.6 per cent to $1,158.54.