Gold and Silver Dipped as Bond Yields and the Dollar Rose

Gold and silver prices declined in Indian markets, tracking a similar trend in global markets. On Multi Commodity Exchange, gold futures fell by 0.1% and settled at Rs 44,904 per 10 gram, while silver dropped 1% and touched Rs 67,100 per kg. Meanwhile, in the previous session, gold had boosted by 0.3% amid volatile trade. On Thursday’s session, the white metal gained 0.7%. According to HDFC Securities, MCX gold has near-term resistance at Rs 45,200-45,600 per 10 gram while support at Rs 44,100 per 10 gram.

The yellow and white metals showed extreme volatility after the U.S. Federal Reserve meeting outcomes on March 17. Gold and silversettled on a positive note in the global market.

Globally, the yellow metal declined today as bond yields increased and the U.S. dollar recovered. Spot gold dipped by 0.4% and touched $1,730.06 an ounce after falling 0.5%. Additionally, the yield on the U.S. 10-year Treasury note has gained past 1.75% level for the first time in 14 months. Moreover, the surge in bold yields has weighed on gold, which does not offer interest. The U.S. dollar index boosted to 91.882, making gold expensive for holders of other currencies.

Weighing on gold value is also weaker investor interest

Among other precious metals, silver dipped by 0.6% and touched $25.89, while platinum decreased by 0.7% and settled at $1,198.19.

According to Kotak Securities, weighing on gold value is also weaker investor interest, as is evident from ETF outflows. They say that the precious metal could remain under pressure as U.S. bond yields are at elevated levels while ETF buyers remain unconvinced by recent price surges.

Moreover, among other commodities, oil today tumbled for the sixth straight session on growing worries about increasing coronavirus infections in Europe as several large economies have had to reimpose lockdowns. A rally in the U.S. currency, which was supported by higher U.S. bond yields, also pressured oil prices, as a stronger greenback makes oil more expensive for other currencies holders.