Gold prices in India today near lowest in a month, silver rates drop further

In global markets, gold rates edged higher to $1,738.90 per ounce after falling to near one-month low in the previous session. Renewed strength in US dollar, which hovered near one-month high against a basket of other currencies, and higher bond yields have put pressure on the yellow metal. Among other precious metals, spot silver gained 0.2% to $19.04 per ounce while platinum rose 0.3% to $877.70.

Risk sentiment has weakened significantly amid growth worries and expectations that central banks may continue with monetary tightening to bring inflation under control, said Kotak Securities in a note. Risk aversion has caused market players to switch from riskier assets like equities and commodities to the safety of the US dollar, the brokerage added.

“FOMC minutes and mixed comments from the Fed officials indicate that the central bank is debating inflation against growth to determine further moves. With inflation still out of control, rate hikes are likely to continue however Fed officials are debating the pace of rate hike amid increasing growth concerns. Despite increased debate, risk sentiment has weakened on concerns that rate hikes may continue tightening liquidity and hampering economic growth,” Kotak Securities said. 

A stronger US dollar makes gold more expensive for buyers holding other currencies. Recent hawkish comments from Fed officials have lifted US dollar and bold yields, denting bullion’s safe-haven appeal. Gold traders will now be focusing on Fed’s Jackson Hole, Wyoming, symposium of global central bankers due later this week.

ETF flows into gold remained subdued. The holdings of SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, said fell 0.15% to 987.56 tonnes on Monday from 989.01 tonnes on Friday.

Gold technical outlook

“Expect mild recovery upticks in gold for the day. However, short term upside turn around point is placed at $1800,” domestic brokerage Geojit said. 

Silver price outlook: “Broad sentiment remains on the weaker side but a mild recovery may be seen in the initial hours. A direct break above $21 would negate the bearish outlook,” the brokerage added.

 (With Agency Inputs)

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