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Gold price: A strong US dollar has put pressure on precious metals such as silver
Gold and silver prices remain subdued in the Indian market today amid the global trend in precious metals. On MCX, yellow metal futures fell 0.4% at Rs50,200 per 10 grams, while silver fell to a multi-year low of Rs52,395. In the global market, gold fell to a six-week low against the US dollar. The yellow metal fell 0.3% to $1,706.31 per ounce as the dollar index rose 0.29% to 108,983. US bond yields are expected to continue with the aggressive policy of the US Federal Reserve.
Although gold is generally seen as a hedge against inflation, high interest rates increase the opportunity cost of holding a non-yielding asset and boost the dollar.
"Gold is trading at a 6-week low due to surprise comments from Federal Reserve officials despite continued strength in the US dollar and mixed economic data. Also weighing on the price are concerns about the health of the Chinese economy, which may reduce consumer demand. ETF flows reflect weak investor interest." Gold has recovered sharply from recent highs and is now at $1,700/oz, but we can see continued weakness in the US dollar and bond yields without significant correction," he said.
Despite the recent drop in gold prices, investor interest has been weak. Shares in SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, fell 0.3% to 973.37 tons on Wednesday, it said.
Among other precious metals, silver fell 0.8% to $17.83 per ounce after more than two years of declines in the global market.
Gold, silver technical outlook
Bullion prices retreated sharply and silver prices fell from two-year lows on Wednesday as the dollar index and bond yields strengthened to fight inflation. "Base metal remains negative, while technical studies add to the weak structure," said Mehta Equities Ltd.
"However, due to the excessive situation, we can see some consolidation of the yellow metal in the future. Eurozone inflation hit a record high of 9.1% in August, so the Fed may raise interest rates to control inflation. However, US non-farm payrolls data ADP released on Wednesday came in lower than expected and supported the lower gold price.
"Gold $1698-1684, resistance $1722-1735. Silver has support at $17.55-$17.40 and resistance at $18.25-$18.42. In rupee terms, gold has a range of Rs50,050-49,840 , with resistance at Rs50,520-50,740. Silver has 52,550-52,120 pounds, resistance at Rs53,580-53,910."
