Gold price slides further to Rs 47,600 per 10 gm, silver at Rs 68,000 a kg

Gold price on Friday slipped to Rs 47,600 from Rs 49,000, while silver price fell by Rs 1,000 to trend at Rs 68,000 per kg, according to the Good Returns website.

Gold jewellery prices vary across India, the second-largest consumer of the metal, due to differing excise duty, state taxes, and making changes in different states.

In New Delhi, the price of 22-carat gold fell by Rs 400 to Rs 46,500 per 10 gm, while in Chennai it declined to Rs 44,830. In Mumbai, the rate fell by Rs 1,400 to Rs 46,600, according to the Good Returns website. The price of 24-carat gold in Chennai was Rs 48,900 per 10 gm.

In the international market, Gold dropped more than 2 per cent on Thursday to break below the key psychological $1,800 level as a jump in the dollar and US Treasury yields eroded bullion's appeal.

Spot gold was 2.3 per cent lower at $1,790.92 per ounce by 10:44 a.m EST (1544 GMT), after touching a more than two-month low of $1,784.76. US gold futures slipped 2.5 per cent to $1,788.80.

Silver was caught in the slipstream, losing 2.6 per cent to $26.16.

Silver prices have declined more than 13 per cent since a GameStop-style retail frenzy sent them to their highest in nearly eight years at $30.03 on Monday.

The steepening of the yield curve "ultimately means the cost of holding gold across the curve is increasing. Gold could go even lower and consolidate in response to... the whole idea that the US and global economy is recovering," said Bart Melek, head of commodity strategies at TD Securities.

However, going forward silver could benefit from its demand for industrial purposes, Melek added.

Allaying some concerns over the health of the economy was a drop in Americans filing new applications for unemployment benefits last week.

Making bullion more expensive for holders of other currencies, the dollar scaled an more than two-month peak while longer-term US Treasury yields rose on anticipation of a large pandemic relief package from Washington and a stabilizing US labor market.

While gold usually gains from more stimulus, since it is considered a hedge against inflation from widespread stimulus measures, higher yields challenge that status because they increase the opportunity cost of holding non-yielding bullion.

"Growing expectations about a relatively quick end to the pandemic are raising economic recovery hopes and with it the likelihood of central banks reducing the current hyper-dovish monetary stimulus," ActivTrades chief analyst Carlo Alberto De Casa said in a note.

Gold Price Analysis: XAU/USD stays en route $1,777 on NFP day – Confluence Detector

Gold consolidates the heaviest losses in over a month around $1,795 during early Friday. The yellow metal dropped to a nine-week low the previous day before recovering from $1,785, Fxstreet reported.

While the broad US dollar gains remain on the table, which has been weighing on gold prices off-late, the pre-NFP trading lull seems to challenge the commodity trading by press time. That said, the US dollar index (DXY) rises to a fresh high since December 01 while the market’s risk barometer in Asia, S&P 500 Future, also prints mild gains.

Moving on, the US Nonfarm Payrolls (NFP) and Unemployment Rate for January will be the key for the global markets amid hopes of recovery in the world’s largest economy.

Gold: Key levels to watch

Despite the recent corrective pullback, gold remains below the key resistance area around $1,805, not to mention the adjacent hurdle near $1,797. As a result, sellers are well directed towards Pivot Point 1 support on the monthly chart, near $1,777.

However, the previous day’s low around $1,785 can offer an intermediate halt during the fall. Also filtering the moves could be the third support of pivot on weekly formation around $1,781.

Meanwhile, the previous high on 4H and 15-minutes join 23.6% Fibonacci retracement of the daily chart (1D) to guard immediate upside around $1,797.

Following that, the previous month’s low and SMA5 on 4H join 38.2% Fibonacci retracement level on 1D to highlight $1,804 as the resistance.

It should be noted that the pivot point support two on the weekly chart as well as SMA 100 on 15-minute play strengthens the resistance region around $1,805.

Price of Gold Fundamental Daily Forecast – Bearish News Piling Up as Gold Heads Toward $1787.30 – $1711.70

The U.S. Dollar continues to rise as pessimism about the U.S. economic outlook recedes before the release of important data on the jobs market, said Fxempire.

Gold futures are trading sharply lower on Thursday, hitting its lowest level since January 19, as a firmer U.S. Dollar dented foreign demand for the dollar-denominated asset. Helping to generate the downside pressure are weaker silver prices, firming U.S. Treasury yields and a less-pessimistic outlook for the U.S. economy.

At 11:01 GMT, April Comex gold is trading $1813.30, down $21.80 or -1.19%.

The selling could extend into $1787.30 to $1711.70 over the near-term as brokerage clients continue to liquidate their “safe-haven” buys and long positions placed in anticipation of a weaker U.S. Dollar and massive amounts of fiscal and monetary stimulus. Did I miss any reasons speculative bulls were using to place their bullish bets?

Speculative Buying in Silver Subsides

The recent speculative move in silver appears to have worn off since this week’s rally failed to attract enough buyers to sustain a rally over $30. However, this doesn’t automatically mean the rally is over.

The market may continue to find support over the near-term, buoyed by hopes global stimulus measures would lead to a pick-up in industrial demand.

10-Year Treasury Yields at More than Three-Week Peak

U.S. Treasury yields continued to climb on Thursday morning, as investors watched for progress on an economic relief plan, and also following better-than-expected private jobs data on Wednesday.

The yield on the benchmark 10-year Treasury note rose to 1.139% at 08:30 GMT, while the yield on the 30-year Treasury bond advanced to 1.927%.

Treasury yields continued to rise, after data released Wednesday showed private companies added 174,000 jobs in January, which was well above the 50,000 payrolls estimate from economists surveyed by Dow Jones. It also marked an improvement from the 78,000 decline in private payrolls in December.

Rising yields tends to weigh on gold prices because the precious metals doesn’t pay any interest to hold it.

US Dollar Trades Near Two Month Peak

The U.S. Dollar continued to rise on Thursday as pessimism about the U.S. economic outlook recedes before the release of important data on the jobs market.

Sentiment for the dollar has improved recently as progress in coronavirus vaccinations, moves by U.S. President Joe Biden to pass more fiscal stimulus, and improving economic data forced some bearish investors to give up their short positions.

The dollar faces another test on Friday with the release of non-farm payrolls data, which will help confirm whether the world’s largest economy has been able to shrug off a dip in growth toward the end of last year.

Data due on Friday is forecast to show the U.S. economy added 50,000 jobs in January, which would be a mild recovery from shedding 140,000 jobs in the previous month as a spike in coronavirus infections curbed economic activity.

Daily Forecast

Later today at 13:30 GMT, gold traders will get the opportunity to react to the latest Labor Department report on weekly jobless claims. Economists polled by Dow Jones expect first-time claims to total 830,000 for the week that ended January 30, which would mark a slight reduction on 847,000 new claims made the previous week.

Figures for factory orders in December are due to be released at 15:00 GMT.

Investors’ focus also is expected to remain on a $1.9 trillion U.S. coronavirus aid plan, which was passed by the U.S. House without Republican support.

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