Gold was trading lower in Indian markets on April 28, as US bond yields gained strength ahead of the Federal Reserve monetary policy outcome later in the night.
On MCX, gold June futures were trading Rs 244 or 0.52 percent lower at Rs 47,059 per 10 grams at 1011 hours following a weak trend in the international market. It hit an intraday high of Rs 47,273 and a low of Rs 47,038 in the morning trade.
In 2021, the yellow metal has corrected 5.8 percent amid hope of US economic recovery and rising bond yields.
The Federal Open Market Committee (FOMC) started off its two-day meeting on April 27 and will conclude tonight. Experts largely expect the Fed Chair Jerome Powell to keep rates at zero levels.
The US Dollar ended flat, while the benchmark treasury yields surged higher on April 27 and weighed on sentiment. On April 28, US 10-year bond yields gained half a percent to trade at 1.63 percent.
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"It is highly unlikely that Chairman Jerome Powell will change his stance regards to raising interest rates, ending their asset purchases monthly, or focusing on the recent rise in yields of the US 10-year treasury yields," said Sriram Iyer, Senior Research Analyst at Reliance Securities.
Upbeat consumer confidence data also reduced the safe-haven appeal of the yellow metal, as the numbers beat expectations suggesting that the economy would see a robust recovery this year, he added.
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International spot gold and silver prices started weaker in Asian trade, tracking stronger the US treasury yields and dollar ahead of the Fed meeting. The dollar index, which measures the value of the world's leading six currencies relative to the American currency, gained one-tenth of a percent at 91.
June gold futures traded at $1,770.80 an ounce, down 0.45 percent. Technically, "LBMA gold spot is trading on a negative note where breakdown below $1,765 could trigger a bearish reversal in the counter and pull prices to $1,750. Resistance is at $1,774-1,783 levels," Iyer said.
"If MCX Gold June trades below Rs 47,200 per 10 grams, we could see a downside pressure up to Rs 47,000-46,800 levels. However, a bounce back above Rs 47,300 could see a bullish momentum up to Rs 47,550-47,700 levels," Iyer added.
May silver futures traded down by Rs 918 or 1.33 percent at Rs 68,040 per kg after hitting the day's high of Rs 68,680 and low of Rs 67.999, while in the international markets, May silver futures declined 1.29 percent to $26.07 an ounce.
"If LBMA Silver Spot trades below $25.75, we could see a negative momentum up to $25.30-24.60 levels. However, a trade above could push prices up to $26.30-26.77 levels," Iyer said.
MCX May silver could see a sideways momentum within the narrow range of Rs 68,200-69,000 levels, he added.
Both the precious metals settled on a mixed note in the previous session. June gold futures contract settled at $1,778.80 per troy ounce, with a loss of 0.07 percent and silver May futures contract settled at $26.41 per troy ounce with a gain of 0.76 percent.
In the domestic market, June gold futures contract settled at Rs 47,303 per 10 grams with a loss of 0.34 percent and May silver futures contract settled at Rs 68,958 per one kilogram with a gain of 0.40 percent.
The record jump in the US consumer confidence data also restricted gains in gold. The US Conference Board said that its consumer confidence index rose to 121.7, up from March's revised reading of 109.7. The data beat expectations as economists were expecting a reading of around 113.1.
"Consumer confidence in the United States nearly reached pre-pandemic levels last year. Faster rollout of COVID-19 vaccine and $2.3 trillion infrastructure stimulus package by the Biden administrations is supporting the US economy," said Manoj Kumar Jain at Prithvifinmart Commodity Research.
"Ahead of the US Federal Reserve meeting outcome gold prices expected to trade under pressure but silver could get support due to strength in the industrial metals. We expect both the precious metals remain volatile in today's session and gold could trade with a negative bias," he added.
He said gold has support at $1,766-1,754 per troy ounce and resistance at $1,788-1,800 per troy ounce. For silver, support is at $26.00-25.70 per troy ounce and resistance at $26.80-27.10 per troy ounce.
On MCX, gold has support at Rs 47,100-46,920 and resistance at Rs 47,550-47,700; silver has support at Rs 68,500-68,100 and resistance at Rs 69,300-69,900 levels, he said.
Jain suggests selling in the gold around Rs 47,440 with a stop loss of Rs 47,700 for the target of Rs 47,000.
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