Domestic gold and silver prices declined on Tuesday amid a strengthening dollar and a rise in equities, denting the safe-haven appeal of precious metals.
At 3:15 pm, Multi Commodity Exchange gold futures for the month of December quoted at Rs 48,129 per 10 grams, down by Rs 71 or 0.2 percent from their previous close. The December contract of silver was at Rs 65,670 per kilogram, down by Rs 469 or 0.7 percent from its previous close.
Globally, gold and silver eased amid gains in the dollar and the US bond yields. Investors assessed central banks’ likely response to growing inflationary pressure ahead of key policy meetings due this week.
Spot gold was last seen trading down 0.2 percent at $1,803.4 per ounce. US gold futures were down 0.1 percent at $1,804.8 per ounce.
Silver was down one percent at $24.3 per ounce.
Gold is often considered a hedge against inflation, though reduced stimulus and interest rate hikes push government bond yields up, denting the bullion’s appeal.
Back home, the rupee edged higher to 75.03 against the US dollar during Tuesday's session.
The dollar index - which measures the greenback against six other currencies - rose as much as 0.2 percent to 93.95, in a bounceback after a series of losses recently. Weakness in the greenback makes the precious metals more attractive for holders of other currencies.
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On Dalal Street, benchmark indices Sensex and Nifty50 extended gains to a second straight day, led by strength in financial and oil & gas stocks. Typically, gains in equities dent the safe-haven appeal of bullion and vice versa. Catch latest market updates here
Should you take positions now?
Gold and silver are expected to remain positive, and any decline in the prices to give investors a buying opportunity, said Manoj Kumar Jain, Director-Head of Commodity Research at Prithvi Finmart.
The global gold price could test $1,832 per ounce this week, he said.
He sees support for MCX gold futures at Rs 48,000-47,860 and resistance at Rs 48,440-48,700. For silver, he sees support at Rs 65,700-65,220 and resistance at Rs 66,660-67,200.
Jain suggests buying gold around Rs 48,050 for a target of Rs 48,500 with a stop loss at Rs 47,880, and silver around Rs 65,800 for a target of Rs 67,000 with a stop loss at Rs 65,200.
(Edited by : Sandeep Singh)
First Published: IST