The demand for the safe-haven bullion has been offset by a sustained gain in the US treasury yields and some strength in the US dollar.
Gold futures on
were trading lower by 0.46 per cent or Rs 236 at Rs 50,611 per 10 grams. However, silver futures dropped 0.50 per cent or Rs 308 to Rs 60,817 per kg.
Bullion is considered a hedge against inflation and as a safe-haven asset during times of political uncertainty, but the Fed hiking short-term US interest rates to fight rising costs raises the opportunity cost of holding gold.
In the spot market, the highest purity gold was sold at Rs 51,125 per 10 grams while silver was priced at Rs 61,321 per kg on Tuesday, according to the Indian Bullion and Jewellers Association.
The spot prices of gold have gained about Rs 850 per 10 grams since May 18, before trading flat in the near term, whereas silver has tumbled more than Rs 1,200 per kg in just two sessions.
“We expect gold prices to trade sideways to down for the day with COMEX Spot gold support at $1,820 and resistance at $1,860 per ounce. MCX Gold Aug support lies at Rs 50,600 and resistance at Rs 51,100 per 10 grams,” said Tapan Patel, Senior Analyst (Commodities), Securities.
Spot gold was flat at $1,835.28 per ounce, as of 0216 GMT, after hitting its lowest since May 20 at $1,832.41 earlier in the session. US gold futures fell 0.6 per cent to $1,838.20.
Spot silver was flat at $21.53 per ounce, while platinum gained 0.2 per cent to $966.68 and palladium firmed 0.1 per cent to $2,000.81.