International gold prices hit their lowest in a week on February 26 and headed for a second straight weekly decline as higher US Treasury yields sapped the appeal of non-yielding bullion.
US gold futures fell 0.5% to $1,767 per ounce on February 26.
Higher bond yields eroded the appeal of gold in the US and the metal looked set for posting a second straight weekly decline.
The precious metal has been under pressure since the start of this year amid hopes of faster global economic recovery and rising US bond yields.
“Gold prices are expected to remain under pressure due to rising bond yields and stronger dollar we believe it can test $1755 on comex and also better than expected economic data from the US tends to weigh on the prices,” said Kunal Shah, Head of Commodities Research, Nirmal Bang.
Gold also struggled in Indian markets for the fourth day in a row and remained near 8-month lows.
On MCX, April gold contracts were trading higher by 0.07% at Rs 46,275 for 10 grams at 0915 hours. March silver futures were trading 0.44% lower at Rs 68,974 a kilogram.
As compared to August highs of Rs 56,200, gold is down about 18% or about ₹10,000.
“Gold is expected to go down on back of rising US bond yield, it may test $1750 to $1720 levels. on MCX it may test Rs 45,500-45,000 levels,” said Anuj Gupta, Deputy Vice President, Commodity and Currency Research at Angel Broking.
“Traders can sell gold at Rs 46,500 levels with the stop loss of Rs 46,900 for the target of Rs 45,500 levels. They can also for sell in silver at Rs 69,200 levels with the stop loss of Rs 70,000 levels for the target of Rs 67,000 levels”, he said.