"The monetary squeeze has sent yields on US government bonds past 3% and fuelled five weeks of gains for the dollar, making non-interest-bearing gold less attractive, says Rahul Kalantri, VP Commodities, Mehta Equities.
In global markets, gold edged higher today as a decline in US Treasury yields offset pressure on dollar-priced bullion. Spot gold was up 0.2% at $1,856.75 per ounce. Among other precious metals, silver gained 0.4% to $21.87 per ounce, while platinum dipped 0.1% to $954.98, and palladium rose 0.5% to $2,107.80.
Mr Kalantri expects bullion prices will remain volatile today. “Gold has support at $1850-1840, and resistance at $1874-1984. Silver has support at $21.65-21.40, while resistance is at $22.28-22.55. In rupee terms, gold has support at ₹50,770–50,610, while resistance is at ₹51,280–51,550. Silver has support at ₹60,840-60,350, while resistance is at ₹62,150–62,510," he added.
US consumer prices are set to be released on Wednesday. “Still, there could be more bond market swings to come as a swathe of inflation data feeds the debate on price pressures and monetary policy," he said.
While gold is seen as a safe store of value during times of political and economic crises, it is highly sensitive to rising short-term U.S. interest rates, which raise the opportunity cost of holding bullion.
In a note, Geojit says, gold has support at $1848 and a direct drop below the support would bring in further pressure. Else, expect a choppy trading session for the day, it said.
For silver, “while prices stay below $23 there are chance of further liquidation pressure. A direct rise above $23.80 is an early recovery signal."
Ravindra Rao, Head Commodity Research at Kotak Securities, said: “Gold is also supported by safe haven buying amid increasing risks for Chinese economy and continuing Russia-Ukraine fighting. However, weighing on price is Fed’s monetary tightening stance and continuing ETF outflows. Gold has fallen sharply in last few days however prices are now attempting to stabilize near $1850/oz level and we may see some more recovery if US dollar rally stalls."
(With Agency Inputs)
