Gold prices in India fell slightly but remained near two-week highs amid firm global rates. On MCX, gold futures fell 0.03% to ₹48,415 for 10 grams while silver increased by 0.3% for ₹62,559 per kg. In international markets, gold hovered near a two-week high at $1,827.37 an ounce ahead of the release of US inflation data due this week.
Gains were capped as high yields on US Treasuries limited bullion’s gains. Among other precious metals, silver rose 0.4% to $23.27 an ounce, while platinum fell 0.2% to $1,030.08.
“Despite the highest US 10-year bond yields in two years, gold rebounded to $1,829 yesterday as inflation concerns and tensions between Russia and Ukraine increase demand. Technically , $1,820 and $1,814 are holding strong support on the intraday charts, so any moves below these levels will lead to declines,” said Vidit Garg, Director of MyGoldKart.
“The RSI is close to 70 levels and while the ADX at 40 signals, there is still little spark to the upside. On the upside, resistance holds at $1,837 as the dollar index and rising bond yields will continue to limit gains,” he added.
Gold prices have been stuck in a range so far this year. Analysts say inflation concerns supported bullion lower, while rising expectations for interest rate hikes from the US Federal Reserve limited gains.
“Gold is supported by volatile equities, ETF inflows, geopolitical tensions and inflationary concerns, but rising bond yields and gains in the US Dollar Index have limited the upside. Gold may remain in a range near $1,800 an ounce amid mixed factors, but rising expectations for monetary tightening may limit the upside,” said Ravindra Rao, vice president responsible for commodities research at Kotak Securities.
U.S. inflation data for January is due on Thursday and after last week’s strong jobs data, expectations of more rapid policy tightening from the U.S. central bank are rising.
Gold is often seen as a hedge against inflation, but rising rates increase the opportunity cost of holding non-performing bullion.
Holdings in SPDR Gold Trust GLD, the world’s largest gold-backed exchange-traded fund, rose 0.4% on Tuesday, the data showed. (With agency entries)
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