Gold Dips Nearly 1 Percent as Strong Dollar and High Yields Weigh
Gold prices dropped nearly 1% in futures trading on Monday (October 5), while silver prices rose over 0.5% on the Multi Commodity Exchange (MCX). The decline in gold was attributed to a stronger US dollar and elevated bond yields, while silver followed a firmer global trend. On the MCX, December gold futures fell ₹1,020 to ₹1.49 lakh per 10 grams, extending a 2% loss from the previous week. Silver for December delivery increased ₹1,223, or 0.54%, to ₹2.27 lakh per kg.
The dollar index hovered near an 18-month high of 102.37, and elevated US Treasury yields continued to limit gold's recovery, according to Kaveri More, Commodity Technical Analyst at Choice Broking. Ashish Rajodiya, Head of Commodities at PL Capital, noted that gold was caught between softer US economic data and the impact of a firm dollar and high Treasury yields. He expects gold to remain range-bound, with support at ₹1.45 lakh and resistance at ₹1.51 lakh per 10 grams.
In global markets, Comex gold futures for December delivery were marginally higher at $4,163.50 per ounce in New York. Gold held above $4,150 an ounce after briefly crossing $4,200 on Friday (October 2), supported by a weaker-than-expected US jobs report, said Akshat Siddhant, Lead Quant Analyst at Mudrex. However, investors still priced in a nearly 70% chance of a December rate hike.
Manav Modi, Commodities Analyst at Motilal Oswal Financial Services, noted that gold's recovery was constrained by elevated US Treasury yields, with the 10-year yield around 5.2% amid inflation concerns. Meanwhile, physical gold demand in India remained steady but selective at current price levels, according to Darshan Desai, CEO of Aspect Bullion & Refinery. The festive and wedding season could provide support to demand.