Gold and silver prices struggled in Indian markets today after a sharp rise in the previous session. On MCX, June gold futures were flat ₹44,977 per 10 gram while silver rates were down 0.35% at ₹63,595 per kg. In the previous session, gold had risen 1% while silver 0.9%. In the first three months of this year, gold is down about ₹5,000 per 10 gram in Indian markets and as compared to all-time high of ₹56,200, hit in August last year, the precious metal has corrected ₹11,000 from those levels.
In global markets, gold prices edged higher today after US President Joe Biden unveiled his “once-in-a-generation” investment infra plan of more than $2 trillion in transportation, telecoms and energy infrastructure. This comes just months after the passage of a $1.9 trillion stimulus bill. Some analysts fear that stimulus measures will stoke inflationary pressure in the economy and gold is often considered as a hedge against it.
Spot gold was up 0.2% at $1,710.28 per ounce. Among other precious metals, silver dipped 0.1% to $24.36, while platinum was down 0.3% at $1,184.
“Gold may remain under pressure until US dollar or bond yields correct sharply however price may gain some support from Fed’s dovish stance and rising virus concerns,” Kotak Securities said in a note.
Equities in Asian markets were mostly higher today, tracking a strong finish on Wall Street. The dollar index was flat at 93.233 after completing its best quarter in a year. US 10-year Treasury yields were also steady at 1.74%.
The US dollar is expected to remain strong for at least another month, according to a Reuters poll of forex strategists, who still expect the currency will weaken in the longer term. A stronger dollar and rising yields put pressure on gold.
Gold traders will closely watch US employment report due on Friday.
India’s largest commodities exchange MCX on Wednesday said that the first delivery day of the MCX Gold contracts with April expiry, witnessed a record 6-year high single day delivery volume for Gold 1 KG and Gold Mini 100 gram contracts, together at 2035 kg which amounted to ₹887.40 crore.
The exchange also said that it saw delivery of 190 kg in the form of domestically refined gold 100 gram bars in the MCX Gold Mini (100 gram) April contract. (With Agency Inputs)