Gold extended its losses to the sixth day
Gold extended its losses to the sixth day when futures on Multi Commodity Exchange declined by 0.4% to Rs 46909 per 10 gram. Silver futures rose by 0.6% and traded at Rs 69,450 per kg but were off day’s highs. Remarkably, in the previous session, the yellow metal had dipped 0.42%, while the white metal had lost 1.75%. Last week gold rates in India had boosted to a two-month peak of Rs 48,400.
After strong gains last year, during which gold had reached a new high of Rs 56,200, the precious metal has struggled in 2021 amid increasing U.S. bond yields and optimism about economic recovery.
In global markets, gold rates declined by 0.3% to $1,777 per ounce. Meanwhile, U.S. Treasury yields rose, and the greenback firmed, while investors awaited U.S. GDP data due later today.
The yellow metal gained momentum after the Fed’s pledge for an accommodative fiscal policy stance in Wednesday’s policy meeting. According to Hareesh V, Research Head Commodities at Geojit Financial Services, concerns over the economic impact of the second wave of COVID-19 pandemic and a softer greenback also benefited gold. Furthermore, a steady equity market and signs of economic recovery in the U.S. and China may dent substantial gains in the commodity.
Gold’s rise could be capped due to weaker investor interest
The precious metal tends to benefit from widespread stimulus measures from central banks as it is viewed as a hedge against inflation.
Moreover, gold’s rise could be capped due to weaker investor interest and concerns about Indian demand amid higher price and virus-related restrictions.
Overnight, U.S. President Joe Biden, in his first speech to Congress, announced laid out a sweeping $1.8 trillion package for families and education.
Moreover, silver boosted by 0.6% to $26.34 per ounce, while platinum surged 0.3% at $1,222.93. On gold traders’ radar will be U.S. GDP data due tonight.
