Gold futures on the Multi Commodity Exchange (MCX) witnessed a decline on Wednesday, falling by 0.31% to Rs 158,466 per 10 grams. This drop was primarily driven by weak global cues, as international gold prices edged lower amid a stronger US dollar and rising bond yields. The most active gold contract for February delivery saw a reduction of Rs 489, or 0.31%, from its previous close.
Silver Also Trades Lower
In tandem with gold, silver futures also traded in the red. The white metal declined by 0.57% to Rs 93,200 per kg on the MCX. The March silver contract slipped by Rs 534, reflecting the bearish sentiment prevailing in the precious metals market.
Global Factors Influencing Prices
On the international front, spot gold in global markets was trading lower at $2,662.09 per ounce, down 0.5%. The decline was attributed to a stronger US dollar, which makes gold more expensive for holders of other currencies, and an uptick in US Treasury yields. Investors are closely monitoring the US Federal Reserve's monetary policy stance, as any hints of further interest rate hikes could weigh on gold prices.
Additionally, market participants are awaiting key US economic data, including the consumer price index (CPI) and producer price index (PPI), which could provide further direction for the precious metals market. A higher-than-expected inflation reading might reinforce expectations of tighter monetary policy, potentially pressuring gold prices further.
Outlook for Gold
Analysts suggest that gold prices may remain under pressure in the near term due to the strength of the US dollar and rising bond yields. However, geopolitical tensions and central bank buying could provide some support. The MCX gold futures are expected to trade in a range of Rs 157,500 to Rs 159,500 in the coming sessions, with a bearish bias.
Silver prices are also likely to track gold, with potential support at Rs 92,500 and resistance at Rs 94,000 on the MCX. Investors are advised to keep an eye on global macroeconomic developments and the dollar index for further cues.
