Higher US 10-year treasury yields lower the appeal of zero-yield gold, while a stronger dollar makes greenback-priced bullion more expensive for overseas buyers.
Gold futures on
were trading with mild cuts by 0.10 per cent or Rs 50 at Rs 51,044 per 10 grams. However, silver futures were trading lower by 0.64 per cent or Rs 395 at Rs 61,487 per kg.
Higher short-term US interest rates raise the opportunity cost of holding bullion, but gold is also seen as a safe haven during economic crises, like a recession.
In the spot market, the highest purity gold was sold at Rs 51,184 per 10 grams while silver was priced at Rs 62,073 per kg on Monday, according to the Indian Bullion and Jewellers Association.
The spot prices of gold have gained about Rs 900 per 10 grams in the last two weeks, whereas silver has gained more than Rs 2,000 per kg in the same period under review.
Gold prices are witnessing indecisiveness on account of growth worries, geopolitical uncertainty, spiralling inflation, and weaker dollar and bond yields, said Ravi Singh, Vice President and Head of Research, ShareIndia.
“Investors are not able to decide whether to buy on dips or short on highs. The indecisiveness in gold may remain for some time,” he added.
“We expect gold prices to trade sideways to down for the day with COMEX Spot gold support at $1,840 and resistance at $1,870 per ounce. MCX Gold Aug support lies at Rs 50,800 and resistance at Rs 51,400 per 10 gram,” said Tapan Patel, Senior Analyst (Commodities),
Spot gold fell 0.3 per cent to $1,849.92 per ounce, bringing its monthly loss to 2.4 per cent so far, and is the biggest loss since September. US gold futures also slipped 0.3 per cent to $1,851.90.
Spot silver dipped 0.6 per cent to $21.82 per ounce, and is down about 4.1 per cent so far this month. Platinum fell 0.5 per cent to $954.48 but is still set for its first monthly gain in three at about 2.5 per cent.
Palladium gained 0.5 per cent to $2,042.69 but is down about 12 per cent this month, its most since November.