NEW DELHI: Gold and silver futures prices in the domestic market traded with cuts in the morning trade on Thursday, as the dollar hit a more than a week high mark against rival currencies in the previous session. A stronger dollar makes gold more expensive for holders of other currencies.
Meanwhile, the Fed on Wednesday left its key overnight interest rate near zero and made no change to its monthly bond purchases, pledging again to keep those economic pillars in place until there is a full rebound from the pandemic-triggered recession.
Gold futures on Multi Commodity Exchange (MCX) were down 0.36 per cent or Rs 177 at Rs 48,688 per 10 grams. Silver futures dropped 1 per cent or Rs 666 to Rs 65,870 per kg.
“COMEX gold trades 0.5 per cent lower near $1,835/oz after a 0.3 per cent decline yesterday. Gold weakened as the Fed painted a downbeat outlook for the US economy but did not hint towards additional measures. Fed’s downbeat growth outlook and ECB’s willingness to cut rates pushed the US dollar higher putting pressure on gold. ETF outflows also showed weaker investor interest,” said Ravindra Rao, VP- Head Commodity Research at Kotak Securities.
In the spot market, gold in the national capital declined Rs 231 to Rs 48,421 per 10 gram on Wednesday. In the previous trade, the precious metal had closed at Rs 48,652 per 10 gram. Silver also dipped Rs 256 to Rs 65,614 per kilogram.
“Gold has come under pressure but we may not see sustained decline as US economic outlook and stimulus expectations may limit upside in the US dollar,” said Rao.
Gold prices edged lower on Thursday as investors opted for the safety of the dollar after the US Federal Reserve flagged concerns about the pace of recovery in the world’s largest economy.
Spot gold eased 0.3 per cent to $1,839.21 per ounce by 0042 GMT. Prices fell to their lowest since Jan. 18 at $1,830.80 on Wednesday. US gold futures shed 0.5 per cent to $1,835.90.
Silver lost 0.2 per cent to $25.18 an ounce, platinum fell 0.2 per cent to $1,063.76, and palladium was flat at $2,304.81.