Gold prices in India traded lower on the Multi Commodity Exchange (MCX) Wednesday after witnessing a sharp rally in the previous session. International spot prices also fell, while the silver price declined by nearly 1 percent.

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At 10:40 am, gold futures for April delivery fell 0.14 percent to Rs 44,794 per 10 grams as against the previous close of Rs 44,857 and opening price of Rs 44,730 on the MCX. Silver futures traded 0.68 percent lower at Rs 67,023 per kg. The prices opened at Rs 66,951 as compared to the previous close of Rs 67,480 per kg.

On Tuesday, gold and silver prices rebounded sharply from 10 months low level as bond yields fell and the dollar index weakened. Short covering also lifted prices of precious metals prices.

“The gold prices have stabilised at multi-month low levels. The precious metal is in oversold territory and we may see a rebound in prices due to short covering. Investment rotation within the commodities will support gold, going ahead,” said Amit Sajeja, Vice President – Research, Commodities & Currencies, ‎Motilal Oswal.

International gold inched lower on Wednesday after posting its biggest jump in two months a day earlier, as firmer US Treasury yields and dollar eroded the metal’s appeal, a Reuters report said.

Spot gold eased 0.2 percent to $1,712.60 per ounce, after rising more than 2 percent on Tuesday as US yields dropped and the dollar eased from multi-month highs. US gold futures fell 0.4 percent to $1,710.50.

US yields recovered on Wednesday, reducing the appeal of holding gold, while the dollar also bounced back. A steady rise in bond yields makes holding gold less attractive as investors typically tend to gravitate toward assets that generate steady income in the form of interest or dividend.

“The short term trend for gold remains positive. Investors can accumulate gold at these levels as the prices may move towards USD 1,740 per ounce,” Sajeja said.

According to him, on MCX, support for gold is placed at Rs 44,450 level and it may face resistance at Rs 45,100 level. Silver may find support at Rs 66,500 level and resistance at Rs 68,500 level, he added.

Meanwhile, investor risk appetite improved as buying was seen in the domestic equity market. This also pressurised the yellow metal prices.

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First Published:Mar 10, 2021 10:52 AM IST