Benchmark US Treasury yields edged higher, having hit a near one-year peak earlier this week. Higher yields increase the opportunity cost of holding bullion, which pays no interest. The dollar was also set to mark a weekly gain, making gold expensive for holders of other currencies.
Gold futures on MCX were down 0.35 per cent or Rs 161 at Rs 45,965 per 10 grams. Silver futures fell 1.34 per cent or Rs 918 to Rs 67,576 per kg.
“Weighing on gold price is higher bond yields and continuing ETF outflows which show weaker investor interest. However, supporting price is the loose monetary policy stance of major central banks, mixed economic data and hopes of additional US stimulus. Gold’s sharp sell-off makes it vulnerable to further losses however the losses seems overstretched given the emphasis on continuing with stimulus measures,” said Ravindra Rao, VP- Head Commodity Research at Kotak Securities.
In the spot market, gold prices in the national capital declined by Rs 320 to Rs 45,867 per 10 grams on Thursday. Silver, however, gained marginally by Rs 28 to Rs 68,283 per kg.
“Gold prices traded under pressure on a stronger dollar and rise in bond yields which has dampened demand for gold. We expect gold prices to trade sideways to down for the day. MCX Gold April futures support lies at Rs 45,700 per 10 gram with resistance at Rs 46,300 per 10 gram,” said Tapan Patel, Senior Analyst (Commodities), HDFC Securities.
Gold prices fell to their lowest in more than seven months on Friday, on course for their worst week since the end of November, as rising US Treasury yields eroded the non-yielding bullion’s appeal.
Spot gold fell 0.4 per cent to $1,769.03 per ounce by 0250 GMT, having touched its lowest since July 2 at $1,759.29 earlier in the session. Prices have declined 3 per cent so far this week. US gold futures slipped 0.6 per cent to $1,765.30.
Silver eased 1.1 per cent to $26.71 an ounce, after falling over 2.5 per cent so far this week, its worst since mid-January. Platinum slipped 2.4 per cent to $1,244.19, while palladium shed 0.7 per cent to $2,334.58.