The dollar index has risen to a two-decade high, making greenback-priced bullion less attractive for other currency holders. Meanwhile, elevated US Treasury yields, which are near three-year highs, further weighed on prices. Spot gold was today down 0.6% at $1,871.96 per ounce. Growing concerns over slowing global economic growth and rising interest rates have strengthened the US dollar.
“COMEX gold trades modestly lower near $1876/oz holding on to last week’s decline. Weighing on gold price is persistent strength in US dollar and higher bond yields amid expectations that Fed may continue with aggressive rate hikes to get inflation under control," said Ravindra Rao, Head Commodity Research at Kotak Securities.
“The downside in gold is however limited amid increasing concerns relating to China, persisting inflation concerns and increasing Russia-Ukraine tensions. Gold has fallen sharply in last few days but we may now see some consolidation with mixed factors in place."
Among other precious metals, spot silver slipped 0.5% to $22.24 per ounce, and platinum fell 1.6% to $948.00, while palladium gained 0.1% to $2,048.69.
Technical outlook for gold and silver
“Expect a choppy trading in gold with mild recovery upticks as long as the support of $1848 remain undisturbed. A direct drop below $1840 would continue liquidation pressure," said Geojit in a note.
While silver prices stay “below $23 there are potential downside for the day. A direct rise above $23.80 is an early recovery signal," the brokerage said.
Axis Securities has a neutral stance on gold and recommends a ‘Buy-on-Dips’ strategy. “Fundamentally, gold prices are inversely correlated with bond yields. US bond yields has risen on an expectation of aggressive rate hikes. Against this backdrop, Gold will continue to be a preferred asset class until uncertainties over the Russia-Ukraine conflict continues and will continue to attract investments as a proven hedge against other asset classes. Gold prices will continue to find support from the geopolitical risk and the inflation pressure in the global environment," the brokerage said.
