Gold prices fall closes to 10-month low at ₹45,304 per 10 gm
The bullion in India again witnessed a dip as it plummeted ₹244 or 0.54 per cent on the Multi Commodity Exchange (MCX) to ₹45,304 per 10 gram. Silver futures has gained ₹511 or 0.76 per cent to trade at ₹67,850 per kg.
Gold prices have dipped by ₹11,000 from its previous high in August last year when it cost ₹56,200 per 10 grams. Silver too has dipped by ₹10,000 as last year the metal had peaked to ₹77,800 per kg.
In the previous session, gold futures closed at ₹45,548 per 10 gram with silver closing at ₹67,339 per kg.
In the international market, the yellow metal eased as the spot gold rate on Wednesday relaxed 0.3 per cent to $1,732.51 per ounce. Spot gold rate dropped to its lowest on Tuesday at $1,706.70 since June 15. US gold futures dipped too, it fell by 0.3 per cent to $1,728.90.
"As long as fiscal stimulus keeps getting pumped into the US economy and the Federal Reserve remains reticent about doing something to quash yields, gold prices will struggle," Bloomberg quoted IG Market analyst Kyle Rodda as saying.
All eyes are on the US Senate debate over the $1.9 trillion Covid relief bill this week. As per the analysts, reported Bloomberg, the US stimulus can raise the prospects of an earlier Fed rate rise.
The prices of the precious metals have dipped on the back of the US Treasury yields that had increased the opportunity cost of holding the non-interest yielding assets after its high performance.
The US Treasury yields have held 1.4 per cent levels despite falling from a one year peak that it touched last week. As per Rodda, gold prices can get relief if, "the Fed comes out and says that it'll control yields or we get an outbreak in inflation expectations that implies that it's going to move out of the Fed's control." Until then it is "the worst of all worlds for gold," he added.