Gold prices today rise above Rs 46,250 but may tank below Rs 45,000, say analysts

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NEW DELHI: Gold and silver futures prices gained on Monday following the trend in the international market, thanks to a decline in dollar but the gains were capped by rise in the bond yields.

The dollar eased against rivals, making gold affordable for holders of other currencies. Benchmark US Treasury yields hit a near one-year peak, increasing the opportunity cost of holding bullion, which pays no interest.

Gold futures on MCX were up 0.19 per cent or Rs 90 at Rs 46,287 per 10 grams. Silver futures rose 0.56 per cent or Rs 388 to Rs 69,400 per kg.

“Gold has bounced back from June 2020 lows gaining support from weaker US dollar, rising inflation expectations, hopes of additional US stimulus and loose monetary policy stance of central banks. However, weighing on price is continuing ETF outflows and higher US and global bond yields. Gold has recovered from recent lows however the gains will be limited until US bond yields correct,” said Ravindra Rao, VP- Head Commodity Research at Kotak Securities.

In the spot market, gold in the national capital tanked Rs 239 to Rs 45,568 per 10 gram on Friday following decline in global precious metal prices. Silver also tumbled Rs 723 to Rs 67,370 per kg.


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“The weaker dollar and rising worries over growing virus cases boosted buying in gold. We expect gold prices to trade sideways to up for the day. MCX Gold April futures support lies at Rs 45,900 per 10 gram with resistance at Rs 46,700 per 10 gram,” said Tapan Patel, Senior Analyst (Commodities), HDFC securities.

“The trend is still bearish for gold prices. The RSI on daily and weekly charts is showing weakness in the momentum which is a bearish sign. Breaking below the recent lows, prices may head towards Rs 45,000 level in coming days. Sell gold (Apr) in the range of Rs 46,300-46,500 for the target of Rs 45,000-44,500 with stop loss above Rs 47,200,” said NS Ramaswamy, Head of Commodities, Ventura Securities.


Global markets


Gold prices edged higher on Monday to recover from an over seven-month low touched in the previous session as the dollar weakened, although higher U.S. Treasury yields capped bullion gains.

Spot gold rose 0.3 per cent to $1,787.31 per ounce by 0100 GMT, having touched its lowest since July 2 at $1,759.29 on Friday. U.S. gold futures gained 0.4 per cent to $1,784.20.

Physical gold demand in India last week surged as local prices dropped to their lowest levels since June last year, with buying expected to pick up in other Asian centres after the Chinese Lunar New Year holiday week.

Silver gained 1.3 per cent to $27.56 an ounce. Platinum rose 1.7 per cent to $1,295.94, while palladium climbed 1.6 per cent to $2,415.38.

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