Prospects of aggressive rate hikes by the US Federal Reserve lifted bond yields and took the shine off bullion. Markets are pricing in a 75-basis-point rate hike by the US central bank.
Gold futures on
were trading lower by 0.18 per cent or Rs 88 at Rs 49,224 per 10 grams. Meanwhile, silver futures dropped 0.35 per cent or Rs 197 at Rs 56,220 per kg.
Gold prices tumbled sharply and touched their 28-month low amid strong macroeconomic data from the US and elevated bond yields, said ICICI Direct Research in its morning note.
“The number of Americans filing new claims for unemployment benefits declined to 213,000 in the week ended September 10, well below market expectations of 226,000,” it added. “A sharp rise in the US treasury yields, especially short-term yields pressurized bullion prices.”
Benchmark 10-year US treasury yields hovered near their highest level since June, while the dollar was heading for a weekly rise against its rivals.
In the spot market, the highest purity gold was sold at Rs 49,926 per 10 grams while silver was priced at Rs 56,330 per kg on Thursday, according to the Indian Bullion and Jewelers Association.
The spot prices of gold continued to remain under pressure and have plunged Rs 2,200 per 10 grams in about the last three weeks, whereas silver has shed about Rs 1,000 per kg in the last two sessions.
The gold price has witnessed panic selling due to stop losses triggered below Rs 50,000 levels, said Ravi Singh, Vice President and Head of Research, ShareIndia.
“The expectation of an aggressive rate hike by the Fed due to persistently high inflation has induced selling pressure in gold. The gains in the dollar index just doubled the downward thrust. Gold may remain under pressure until the Fed’s outcome,” he added.
“We expect gold prices to trade sideways to down for the day with COMEX Spot gold support at $1,650 and resistance at $1,690 per ounce. MCX Gold October support lies at Rs 48,900 and resistance at Rs 49,800 per 10 grams,” said Tapan Patel, Senior Analyst (Commodities),
Spot gold was flat at $1,663.09 per ounce, as of 0303 GMT, after hitting its lowest since April 2020 at $1,659.47 on Thursday. Prices were down 3.1 per cent for the week so far. US gold futures fell 0.4 per cent to $1,671.40.
Spot silver dipped 0.2 per cent to $19.11 per ounce. Platinum fell 0.4 per cent to $900.60, while palladium was little changed at $2,135.78.
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