Gold prices in India edged lower in Tuesday’s session as analysts believe that risk-on sentiment on prospects for stimulus and vaccine-fuelled economic recovery have dimmed the appeal of safe-haven assets. On MCX, gold April futures were trading Rs 208 or 0.46 percent down at Rs 45,100 per 10 grams. While silver May futures were seen ruling at Rs 67,903 per kg, down Rs 897 or 1.03 per cent. Gold on Multi Commodity Exchange hit a record high Rs 56,191 per 10 grams in August 2020, since it has tumbled Rs 11,901 or 20 per cent, to trade below Rs 46,000-mark. Ajay Kedia, Director, Kedia Advisory, said that even as bullion prices dropped in Tuesday’s session, expectations of increased industrial demand have been limiting further losses.
Gold prices were trading lower on economic growth optimism due to rise in US bond yields and positive economic data, says Tapan Patel, Senior Analyst (Commodities), HDFC Securities. The risk-on sentiment has drawn investors out of safe haven to dollar and equities. Patel told Financial Express Online, that gold prices have been witnessing heavy sell-off since last week with COMEX spot gold prices trading near $1710 per ounce on Tuesday, losing nearly 1 percent for the day.
Analysts say that it is too early to turn bullish on gold after a sell-off of nearly $100 last week. Bhavik Patel, Senior Technical Research Analyst, Tradebulls Securities, told Financial Express Online, that the gold market is struggling to find consistent momentum on the upside after breaking its crucial support of $1760. Price action suggests to stay cautious. “We have also seen seven consecutive weeks of outflows from the Gold ETF and gold is now coming to the point where it will be categorised as oversold. The sentiment is fragile and we would be closely following the moves of Treasury Yields,” Bhavik Patel said.