Gold rates in India were flat on Thursday as the dollar and yields jumped after the US Federal Reserve reiterated its aggressive stance to fight inflation, which weighed on demand for the yellow metal.
On the Multi-Commodity Exchange (MCX), the June gold contract was trading down 0.03% at Rs 51,580 for 10 grams at 11:26 a.m., while the May silver contract was down 0.1% at Rs 66,211 per kg.
Spot gold rose slightly to $1,926.40 an ounce, up 0.1%, as of 11:30 a.m. and the price of spot silver fell 0.2% to $24.39 the ounce.
Rates against the backdrop of the high dollar, which nudged a two-year high against a basket of currencies after Fed minutes showed the central bank is preparing to act aggressively to stave off inflation.
A stronger dollar makes gold less attractive to other currency holders.
“Looking at the 10-year bond yield (rising) and the hawkish tone of the US Fed, gold is losing in a range…instead of being long gold as a safe-haven asset , people went for the dollar,” Jigar Trivedi, a commodities analyst at Anand Rathi Shares, a Mumbai-based broker, told Reuters news agency.
Ravindra Rao, CMT, EPAT, VP-Head Commodity Research at Kotak Securities, said gold is also supported by Russian-Ukrainian tensions and worries about the health of the Chinese economy. “Gold continues to trade in a range above $1900 an ounce amid mixed indices and this trend may continue unless there are new triggers, but geopolitical risks may keep prices supported,” he told CNBCTV18.com.
Rahul Kalantri, VP Commodities, Mehta Equities Ltd., excluding gold and silver, to witness the downside buying. In Indian Rupee terms, Gold has support at Rs 51,240-50,980, while resistance is at Rs 51,840-52,140. Silver has support at Rs65,810-65,420 while resistance is at Rs66 690-67050, he added.
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