16 Jul , 2022 By : Kanchan Joshi
Gold prices today in India breached the key level of Rs50,000 amid recent downtrend. On MCX, gold futures were down 0.3% at two-month low of Rs50,090 per 10 gram after falling to Rs49,971 to at day's low. Silver futures edged lower to Rs54986 per kg. In global markets, the yellow metal has come under relentless pressure in the past month as investors turned to the US dollar amid expectation of another big rate hike by the Fed later this month.
Higher interest rates and bond yields raise the opportunity cost of holding non-yielding bullion.
In India, gold prices had hit Rs52,300 last week after government had hiked import duty. Now prices have corrected more than Rs2,000 in just few days, tracking falling global prices. Bullion dealers told Reuters that the correction is bringing back domestic retail consumers.
“Gold has support at $1700-1688, while resistance is at $1724-1734. Silver has support at $18.00-17.82, while resistance is at $18.60-18.78. In rupee terms gold has support at Rs50,050–49,750, while resistance is at Rs50,560–50,740. Silver has support at Rs54,450-53,750, while resistance is at Rs55,780–56,510," said Rahul Kalantri, VP Commodities, Mehta Equities Ltd.
In global markets, gold was today down 0.3% at $1,704.59 per ounce as the dollar was near 20-year highs against a basket of currencies. The relentless rise in US dollar is suppressing demand for greenback-priced gold among overseas investors, say analysts.
Among other precious metals, spot silver fell 1.1% to $18.18 per ounce.
“COMEX gold trade marginally lower near $1710/oz after testing Aug.2021 lows in previous session. Gold has steadied amid a pause in US dollar index as market players assess further path for Fed’s rate hike. US inflation data has strengthened the case for Fed to consider an even bigger move however most central bank officials have maintained support for 75 basis points rate hike," said Ravindra Rao, VP- Head Commodity Research at Kotak Securities.
"Amid other factors, gold is also pressurized by concerns about Chinese consumer demand, correction across commodities and continuing ETF outflows. Gold has so far managed to hold near $1700/oz level. However, the general bias may be on the downside unless we see substantial correction in the US dollar index," he added.
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