Gold was trading a tad higher in the morning in Indian markets on February 26 but gains were capped due to weak global trends. On the Multi-Commodity Exchange (MCX), April gold contracts were trading higher by 0.07 percent at Rs 46,275 for 10 grams at 0915 hours. March silver futures were trading 0.44 percent lower at Rs 68,974 a kilogram.
Higher bond yields eroded the appeal of gold in the US and the metal looked set for posting a second straight weekly decline.
Muted demand in the spot market was also keeping gold from moving higher.
In the domestic market, gold price dropped for the second consecutive day on February 25 by Rs 392 to Rs 46,446 per 10 gram in the Mumbai retail market on a firm equity market and weak global cues.
Gold and silver fell in the previous session, as the US unemployment claims fell and 10-year bond yield surged to fresh one-year highs.
Both gold and silver settled on a weaker note in international markets. Gold April futures contracts settled at $1,775.40 per troy ounce with a loss of 1.25 percent and March silver futures contracts settled at $27.64 a troy ounce with a loss of 1.25 percent.
SPDR Gold Trust ETF holdings fell 0.6 percent to 1,100.24 tonnes on February 25 from 1,106.36 tonnes the previous day.
In domestic markets, the April gold futures contracts settled at Rs 46,241 per 10 gram with a loss of 0.60 percent and the March silver futures contract settled at Rs 69,276 a kilogram with a loss of 0.38 percent.
"Despite weakness in the dollar index and inflation concerns safe-haven appeal in the precious metals eased due to rising bond yield. We expect gold prices to trade under pressure and could test $1,730 levels in the short-term and silver could find support at lower levels," Manoj Jain, Director (Head-Commodity & Currency Research) at Prithvi Finmart told Moneycontrol.
Gold has support at $1,758-1,744 and resistance at $1,784-1,792. For silver, support is at $27.44-27 and resistance $28-28.20.
"At MCX, gold is having support at Rs 46,000-45,770 and resistance at Rs 46,500-46,660. Silver is having support at Rs 68,800-68,300 and resistance at Rs 69,800-70,400 levels. We suggest a sell on rise in the gold futures contract around Rs 46,400 with a stop loss of Rs 46,720 for the target of Rs 45,800," Jain said.
Sriram Iyer, Senior Research Analyst at Reliance Securities
LBMA gold spot is trading on a negative note below $1,770 and can slip further to $1,752-$1,761. Resistance is at $1,776-$1,784 levels.
LBMA silver Spot is trading below $27.30, indicating sideways to bearish momentum will continue, where resistance is at $28.10-$28.97. Support is at $26.40-$25.77.
For MCX April gold contracts, a trade below Rs 46,000 will extend its bearish momentum up to Rs 45,900-45,650 levels and resistance is at Rs 46,400-46,600 levels.
MCX March silver could see a further downside move up to Rs 68,230-67,000 level. Resistance is at Rs 69,800-70,600 levels.
Hareesh V, Research Head Commodities at Geojit Financial Services
As long as prices hold the support of $1,760, there are chances of recovery in upticks but it has to break $1,880 to extend the momentum. An unexpected drop below $1,750 is an early signal of liquidation pressure.
Ravindra Rao, VP- Head Commodity Research at Kotak Securities
Comex gold was trading about 0.3 percent lower near $1,770 after a 1.3 percent decline the previous day.
Weighing on gold is the surge in US bond yields, improving virus situation and continuing ETF outflows. Supporting price is the loose monetary policy stance of major central banks, geopolitical tensions and hopes of additional US stimulus.
Gold may remain under pressure due to higher bond yields but the US stimulus expectations may limit any major downside.Disclaimer: The views and investment tips expressed by experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.