On Wednesday, December gold futures opened at Rs 75,209 per 10 grams, up by 0.41 per cent or Rs 308. December silver futures also advanced trading at Rs 90,195 per kilogram, or Rs 868, up 1 per cent. Both precious metals have come under pressure from the dollar’s strength and a good run of equities in the US.
The key gold and silver traded lower following profit booking that occurred earlier during the week. The decline in prices was at the tune of Rs 2,000 a 10-gram for gold while to the tune of Rs 1,100 a kilogram for silver. Trades following this session on Tuesday were mixed, as gold futures ended with a decline of 0.60% to Rs 74,901 a 10 grams, while silver futures managed to close higher at Rs 89,327 a kilogram, up 0.16%.
December Gold and silver futures are in the hands of USD
Analysts are pointing to this very recent rally in the dollar index and in crypto as a possible weakening factor in safe-haven asset demand for gold and silver. With the dollar index topping its 6.5-month high, Bitcoin recently spiked to $90,000 per coin, which indicated renewed investor confidence in riskier assets, partially driven by former President Trump’s crypto-focused policies.
The U.S. Dollar Index (DXY) has traded around 105.97, which is up by 0.05% today. On the other side, the U.S. 10-year bond yields have hit a high not seen for four months and further budge demand for precious metals.
Indian commodity analyst gives his expert opinion
Manoj Kumar Jain, commodities expert at Prithvi Finmart Commodity Research, said, “With US 10-year yields rising, the safe haven demand for gold and silver has eased, leaving these markets oversold. We could see a dead cat bounce after today’s US inflation data.”
Volatility would tend to continue unabated as global financial markets look for cues from impending US figures on inflation, added Jain. “Gold and silver prices would remain choppy in the week ahead as some dollar weakness and release of US economy indicators will be witnessed,” he concluded.
All these factors have placed investors in the Indian market at tension and many even opted to book profits while prices remained unstable.
Also, see: Latest Indian gold price continues to hover at one-month low: What are today’s rate?