Gold inched higher on Monday, recovering from an eight-month low touched in the previous session, as a weaker dollar lifted bullion’s appeal.
The dollar had slipped from a one-week high hit in the previous session, making gold cheaper for holders of other currencies.
Gold and silver had crashed on Friday amid a strong rebound in the dollar index and surge in 10-year US bond yields. The 10-year bond yield reached record highs of 1.60% last week and pushed precious metals prices lower.
The yellow metal had also posted its worst monthly fall since November 2016 in February due to rising US Treasury yields, which increase the opportunity cost of holding non-yielding gold.
However, on the Multi-Commodity Exchange (MCX) on Monday, April gold contracts were trading higher by 0.6% at Rs 46,020 for 10 gm in early morning trade as the dollar retreated and investor focus remained on bond yields and the outlook for growth. May silver futures were trading 1.1% higher at Rs 69,541 a kg.
Experts say that the strength in dollar put pressure on gold. Increasing US bond yield seems to have faded out gold safe haven demand.
On the outlook on gold prices, Anuj Gupta, Deputy vice-president, commodity and currency research at Angel Broking said, “We expect that gold may correct further. As of today, traders can go for sell in gold at Rs 46,100 levels with the stop loss at Rs 46,400 levels for the target of Rs 45,600 levels. They can also go for sell in silver at Rs 69,600 levels with the stop loss of Rs 70,200 levels for the target of Rs 67,800 levels”.
Published: March 1, 2021, 14:28 IST
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