Gold and silver prices today: Yellow metal slips to over two-week low amid uptick in US yields

Gold prices opened on the Multi Commodity Exchange (MCX) on Wednesday at Rs 58,550 per 10 grams and hit an intraday low of Rs 58,523. In the international market, prices hovered around $1,922.85 per troy ounce. Meanwhile, silver opened at Rs 71,750 per kg and hit an intraday low of Rs 71,380 on the MCX. The price hovered around $23.16 per troy ounce in the international market.

Anuj Gupta, Head of Commodity and Currency at HDFC Securities, said, “Yesterday, gold prices corrected by 0.52 per cent and closed at 58626 due to no fresh buying interest seen in the market. However, expectation of increase in interest rates by FOMC is also putting pressure on gold. Market is waiting for US Economic data and FOMC decision on interest rates. We also noticed some profit booking in dollar index from higher levels. For trading, gold may trade between $1900 to $1920 levels and on MCX it may trade between 58500 to 59300 levels with mixed to down trend broadly.”

Spot gold ceded the support at $1915 as two-year US yields edged higher by 0.50 per cent to close above 5 per cent.

Praveen Singh, Associate VP, Fundamental Currencies and Commodities, Sharekhan by BNP Paribas, sais, “Spot gold closed with a loss of 0.42 per cent at $1913.64. The US Dollar Index recovered nearly 0.40 per cent from day’s low to 104.92 before it closed almost unchanged at 104.54. The US Dollar Index recovered on risk aversion in wider markets and somewhat weaker than expected UK job data. In addition, investors reassessed Bank of Japan’s Governor Ueda’s comment of ending its ultra-easy monetary policy, which weighed on the Japanese Yen.”

Gold slipped to a more than two-week low amidst an uptick in US yields and as investors are also positioning for the U.S. inflation data scheduled today.

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Manav Modi, Analyst, Commodity and Currency, MOFSL, said, “The dollar index was down 0.1 per cent against its peers, lending gold some support after bullion prices, while the US 10 year yields continue to trade around the 4.3 per cent mark. US CPI data is scheduled for later in the day. The headline number is expected to be reported at 3.6 per cent against the previous data of 3.2 per cent, whereas the expectations for Core CPI is a bit lower.”

If the inflation data is reported better or even in-line with expectations, it could weigh on bullions. Markets are pricing-in a 93 per cent chance of the Fed holding rates steady at the Sept. 19-20 policy meeting, but there’s a 40 per cent chance of a hike in November, according to the CME FedWatch tool.

Modi said, “Fed officials also in their comments last week, raised concerns regarding inflation but were also cautious regarding growth, sharing mixed views on interest rate expectations. The European Central Bank expects inflation in the 20-nation euro zone to remain above 3% next year, bolstering the case for a tenth consecutive interest rate increase on Thursday. Along with US Inflation, focus today will also be on the UK GDP data.”

The ten-year US yields were 0.19 per cent lower though.

Amit Khare, Associate Vice President at GCL Broking, said, “October Gold closed at 58626(-0.49%) and December Silver closed at 71934(-0.02%). Bullion daily charts are making a bottom and trading near the demand zone. Momentum Indicator RSI also indicates the same. Traders are advised to make fresh buy positions in Gold and Silver near the given support level one with the stop loss of support level two and book near the given resistance levels: Gold October Support 58500/58300 and Resistance 58800/59000. Silver December Support 71500/70700 and Resistance 72300/73000.”

Besides, total known global gold ETF holdings fell for the seventh straight day through September 11, thus indicating weak unofficial sector demand.