Gold and silver prices dropped after a sharp rise

Gold and silver prices dropped in Indian markets after a sharp increase in the previous session. On Multi Commodity Exchange, gold dipped by 0.1% and settled at Rs 46,320 after reaching a one-month high of Rs 46,400 during the last session. Meanwhile, silver futures fell 0.34% to Rs 66,405 per kg. In the previous session, gold surged 0.9% while silver gained 1.1%, tracking a sharp decline in the rupee.

The rupee posted its biggest single-day drop in nearly two years after RBI announced a plan to purchase Rs 1 lakh crore-worth government bonds in the current quarter.

Gold rates have rebounded in India from one-year lows of Rs 44,100, reached last week. A weaker U.S. dollar and some softening in U.S. bond yields have led to a mild recovery in global rates.

In international markets, gold rates were steady today, tracking movements in the greenback and bond yields. Gold was flat at $1,737.02 an ounce after a 0.3% fall on Wednesday. The yellow metal was supported by a weak greenback, which traded close to more than two-week lows against major peers.

Meanwhile, the holdings of SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund or gold ETF, dropped 0.35 tonnes to 1,028.69 tonnes on Wednesday. Significantly, it stood at 1,029.04 tonnes on Tuesday.

Among other precious metals, the white metal dipped by 0.3% to $25.03, while platinum surged 0.1% to $1,226.16.

Gold fell by more than 8% this year

In international markets, gold fell by more than 8% this year after seeing a strong rally in 2020. Surging U.S. bond yields and optimism over the global rebound have dampened the safe-haven appeal of gold, which doesn’t earn interest. The yellow metal has also been hit by waning investor interest.

Moreover, it has to be noted that most Asian equity markets were higher today after the U.S. Federal Reserve’s latest meeting minutes showed continued policy support.