Gold prices in the Indian markets today declined after reaching a nearly 3-month high in the previous session. Gold futures fall 0.2% on MCX ₹47,820 while silver futures fell 0.5% ₹62,562 per kg. In global markets, gold fell 0.3% to $1,787 an ounce after jumping 2% overnight. A fall in the US dollar and a fall in the benchmark US 10-year Treasury yield helped support the precious metal. Analysts say that gold has support at 47300- 47070 zone on MCX, while resistance is visible at 48200.
“Since gold is measured in dollars, a weaker dollar means a higher price for the yellow metal. The US Labor Department reported a stronger-than-expected CPI, but volatile food and energy sectors saw most of the increase. Gold prices on Wednesday It broke below resistance near the 50-day EMA to act as support, near 1,776. Analysts at Capitalvia Advisors said a downside trend near 1,800 is acting as target resistance.
Data released Wednesday showed the US consumer price index rose higher than forecast in September, underscoring the persistence of inflationary pressures in the economy. But the yield on the 10-year Treasury fell after an initial rise after data boosted demand for non-interest-bearing bullion.
Furthermore, minutes from last month’s Federal Reserve meeting showed that officials widely agreed they should begin reducing bond purchases in mid-November or mid-December.
The low return reduces the opportunity cost of holding interest-free gold. Among other precious metals, silver rose 0.1% to $23.09 an ounce, having hit a nearly one-month high in the previous session.
“A Pullback in the Dollar and the US Treasury Yield Pushed Internationally” gold prices 2% last night at its highest level in almost a month. The initial reaction after the CPI (Consumer Price Index) data was a sharp jump in yields, which is now starting to fade. Gold is technically at a very interesting time as $1790-$1800 is a very strong resistance area above which it can exit a bearish phase and we can move towards $1,830 – $1,840, while failure to take it to $ 1740,” said Vidit Garg, Director, MyGoldkart
Gold traders will be waiting for US trade list, University of Michigan consumer sentiment, retail sales data on Friday.
Meanwhile, holdings of SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, fell 0.2% to 982.72 tonnes from 985.05 tonnes on Tuesday. (with agency input)
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