Gold prices fell nearly 1% on the Multi Commodity Exchange on Monday, October 5, as a stronger US dollar and bond yields weighed on the metal. Meanwhile, silver gained over 0.5%. Kaveri More said, "Gold prices have remained in a consolidating phase as a stronger US dollar limits upside momentum."
Gold prices fell nearly 1% on the Multi Commodity Exchange due to a stronger US dollar and bond yields, while silver gained over 0.5%.
Gold prices fell nearly 1% in futures trade on Monday (October 5), while silver prices gained over 0.5% on the Multi Commodity Exchange (MCX), as a stronger US dollar and elevated bond yields weighed on gold, while silver tracked a firmer global trend.
On the MCX, gold for December delivery fell ₹1,020 to ₹1.49 lakh per 10 grams. Gold had declined ₹2,887, or around 2%, in the holiday-shortened previous week to end at ₹1.5 lakh per 10 grams.
Silver for December delivery rose ₹1,223, or 0.54%, to ₹2.27 lakh per kg. In overseas markets, silver futures gained 1.58% to $61.31 per ounce.
The dollar index was hovering near an 18-month high of 102.37, while elevated US Treasury yields continued to limit gold's recovery, said Kaveri More, Commodity Technical Analyst at Choice Broking.
"Gold prices have remained in a consolidating phase as a stronger US dollar and elevated bond yields continue to limit upside momentum," More said.
Ashish Rajodiya, Head - Commodities at PL Capital, said gold was caught between softer US economic data, which has reduced expectations of an October Federal Reserve rate hike, and the impact of a firm dollar and high Treasury yields.
He expects gold to remain range-bound, with support at ₹1.45 lakh per 10 grams and resistance at ₹1.51 lakh per 10 grams. The Federal Reserve's October policy decision would be the next major trigger, he said.
In global markets, Comex gold futures for December delivery were marginally higher at $4,163.50 per ounce in New York. Gold is holding above $4,150 an ounce after briefly crossing $4,200 an ounce on Friday (October 2), supported by a weaker-than-expected US jobs report, said Akshat Siddhant, Lead Quant Analyst at Mudrex.
However, investors are still pricing in a nearly 70% chance of a December rate hike, Siddhant said.
Manav Modi, Commodities Analyst at Motilal Oswal Financial Services, said gold's recovery remained constrained by elevated US Treasury yields, with the 10-year yield around 5.2% amid inflation concerns, fiscal pressures and heavy government borrowing.
Meanwhile, physical gold demand in India remains steady but selective at current price levels, according to Darshan Desai, CEO of Aspect Bullion & Refinery. Consumers and jewellers may stagger purchases, while the festive and wedding season could provide support to demand, he said.
Bullion prices could remain volatile this week as investors track US rate expectations, the dollar, bond yields and geopolitical developments. Services PMI data from major economies, US trade figures and consumer sentiment data due later in the week could also provide cues.