Gold rate declines below 49,400; analysts expect choppy trade

NEW DELHI: Gold and silver futures prices in the domestic market continued to gain in the morning trade on Thursday, bucking the trend in the international market, as hopes of a massive stimulus bolstered the prospects for precious metals.

US Treasury yields on the longer end of the curve rose along with inflation expectations on Thursday as the market eyed the prospect for additional debt supply under the new US administration. Higher yields increase the opportunity cost of holding a non-yielding bullion.

Gold futures on Multi Commodity Exchange (MCX) was down 0.18 per cent or Rs 88 at Rs 49,360 per 10 grams. Silver futures slipped 0.77 per cent or Rs 516 to Rs 66,784 per kg.

“COMEX gold trades little changed near $1,866/oz after a near flat close yesterday. Gold steadied today amid a pause in the US dollar’s recent decline. Also weighing on price is upbeat US economic data and lack of any clear cues from ECB or Bank of Japan while ETF investors remained on sidelines,” said Ravindra Rao, VP- Head Commodity Research at Kotak Securities.

In the spot market, gold price on Thursday jumped Rs 575 to Rs 49,125 per 10 gm in the national capital amid firm global market trend. Silver also shot up by Rs 1,227 to Rs 66,699 per kg.

Trading strategy

“Supporting price has increased on US stimulus expectations, US-China tension and rising virus cases. Gold may witness choppy trade unless there are fresh triggers however general bias may be on the upside as US stimulus expectations may keep pressure on the US dollar,” said Rao.

Global markets

Gold inched lower on Friday as US Treasury yields ticked up, though bets of a large US stimulus kept the metal on course for its best week in five.

Spot gold shed 0.3 per cent to $1,863.56 per ounce by 0233 GMT, retreating from its highest since Jan. 8 hit on Thursday. US gold futures eased 0.1 per cent to $1,863.90.

Silver shed 1.1 per cent to $25.67 an ounce, but was set to register its best week in five, up 3.7 per cent so far. Platinum fell 1.2 per cent to $1,113.40, but was set to post its second straight weekly gain, up 3.6 per cent. Palladium eased 0.1 per cent to $2,359.19.

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