In global markets, gold prices hovered near three-month lows as the strength in US dollar continued put pressure on the demand for greenback-priced bullion. Spot gold was down 0.1% at $1,820.54 per ounce. Among other precious metals, spot silver was up 0.5% at $20.76 per ounce while platinum gained 0.8% to $951.50, and palladium rose 1.4% to $1,934.36.
Pritam Patnaik, Head - Commodities, HNI & NRI Acquisitions, Axis Securities, said: “The fall in gold prices can be directly attributed to the dollar index hitting its 20-year high of 104.95 yesterday. Gold is clearly losing its safe-haven store value to a surging dollar. Ideally, a recessionary economic trend, ratcheting up of the geopolitical situation in the Russian - Ukrainian war, with Russia warning of more destructive measures for aspirant NATO members, Finland and Sweden, and a softer bond markets, should have greatly helped gold bulls' cause, but the exact reverse has taken place."
“This could be because the flash correction in the global equity markets has drained liquidity, leading to selling orders across all asset classes. Additionally, the risk premium is fairly entrenched with the US dollar, putting further pressure on gold prices. We are in for another volatile session, with a negative bias," he added.
Gold is also sensitive to US short-term interest rates and bond yields. Last week, the US central bank hiked its benchmark overnight interest rate by an aggressive half-a-percentage point.