Gold prices edged higher in Indian markets today, drawing support from firm global rates. On MCX, gold futures rose 0.4% to ₹48,040 per 10 gram while silver gained 0.9% to ₹69,363 per kg. MCX was closed for trading for the first half due to a public holiday. Tracking a rally in global rates and a weakening rupee, gold rates have rebounded ₹4,000 per 10 gram in Indian markets so far this month.
In global markets, gold rates were flat, giving up early gains. Spot Gold prices was up 0.1% at $1,778.19 after rising as much as 0.6% early in the session. Weakening US bond yields supported gold but gains were capped by a stronger dollar.
The US dollar today rebounded from a seven-week low hit overnight, making gold expensive for holders of other currencies. On the other hand, benchmark 10-year U.S. Treasury yields dropped below 1.6%, reducing the opportunity cost of holding non-yielding bullion.
Among other precious metals, silver was up 0.1% at $25.89 per ounce. Palladium gained 0.4% to $2,778.93, while platinum was flat at $1,187.
Gold traders are are closely watching an auction of 20-year U.S. Treasuries later today, which will be an important gauge of global demand for fixed income.
US stock futures were mixed today after a sharp fall on Wall Street overnight. Recent optimism about rising vaccination rates in the United States, Britain and the European Union is shifting to concern that record coronavirus infections in many countries.
“The US Federal Reserve has continued to play down inflation concerns and maintained the need for lower interest rate amid persisting risks from the pandemic. Gold also benefitted from worsening virus situation in countries like India which has forced authorities to impose stricter restrictions,” Kotak Securities said in a note.
“ETF inflows also showed some buying interest in gold however the pace was marginal. Gold moved in a broad range of $1670-1750/ounce for last few days and has now given a break on the higher side, indicating positive movement. But it has struggled to move towards the key $1800/ounce level. While mixed trade is likely, the general bias may be on the upside until US dollar is under pressure,” the brokerage said. (With Agency Inputs)