Gold prices fell in the Indian market on Friday as strength in the Indian rupee against the US dollar weighed on the yellow metal. On MCX, gold April futures were trading Rs 269 or 0.60 per cent down at Rs 44,610 per 10 gram as against the previous close of Rs 44,879. While silver May futures were ruling at Rs 66,791 per kg, down Rs 754 or 1.12 per cent, as compared to the previous close of Rs 67,545 per kg on the Multi Commodity Exchange. From a record high of Rs 56,191 per 10 gram on MCX in August 2020, gold prices have plunged Rs 11,581 per 10 gram or 20.61 per cent.
The elevated US Treasury yields continue to remain a headwind for the precious metal, says Jigar Trivedi, Fundamental Research Analyst, Anand Rathi Shares and Stock Brokers. “Amid strength in rupee, we expect the yellow metal to stay weak,” Trivedi added.
Rupee gains 0.52% YTD against US dollar
Indian Rupee was seen trading at 72.68 against the US dollar, up 0.30 per cent or 0.22 paise. On a year-to-date (YTD) basis, the rupee has risen over half a per cent against the US dollar. On Friday, it opened at 72.66, as compared to a previous close of 72.91. The House of Representatives gave the final approval to one of the largest economic stimulus measures in US history, a sweeping $1.9 trillion COVID-19 relief bill that gives President Joe Biden his first major victory in office. The holding at the SPDR GOLD ETF has also continued to drift lower yesterday too, from 1,060 tonnes on Wednesday to 1,055 tonnes on Thursday.
Despite the weak US Dollar, gold in COMEX failed to move up showing a shift in trend. Market sentiments have shifted from positive to negative following recent gains in US fixed income bonds and notes, coupled with a stronger US dollar, rising US equities markets and strong gains in Bitcoin, says Bhavik Patel, Senior Technical Research Analyst, Tradebulls Securities. “Because of these reasons, we are seeing continuous outflow in Gold ETFs. Money managers have liquidated their long and added fresh short positions, a development that saw the long-short ratio drop below 2 for the first time since May 2019,” Patel told Financial Express Online.
Check for these levels in MCX gold next week
Patel believes that any further weakness may emerge if gold falls below $1680 in COMEX or Rs 44000 in MCX. Any recovery in gold is only expected above Rs 45,600 or above $1760 in COMEX. “Till then we expect prices to remain subdued within the range of Rs 44,200-45,200 for next week,” he added.
While globally, gold prices retreated on Friday as firmer US bond yields and a strong dollar weighed on the metal, but bullion was on course for its biggest weekly gain in seven. Spot gold eased 0.3 per cent to $1,716.86 per ounce while US gold futures lost 0.4 per cent to $1,716.10.
(The views and investment tips in this story are expressed by the respective experts of a research and brokerage firm. Financial Express Online does not bear any responsibility for their advice. Please consult your investment advisor before investing.)