Gold and silver prices today edged lower in Indian markets today after a strong surge in the previous session. On MCX, gold futures fell 0.12% to ₹47,200 in their fifth fall in six sessions. Silver futures edged 0.2% lower to ₹68,593 per kg. In the previous session, gold had surged 1.2% while silver 2.8%.
In global markets, gold prices today edged higher, as weaker-than-expected U.S. jobs data re-ignited concerns over a recovery in the world’s largest economy, pressuring the dollar and boosting bullion’s appeal.
Spot gold rose 0.1% to $1,813.99 per ounce. The dollar fell from an over two-month peak on Friday after a U.S. jobs report indicated a slow recovery from the impacts of the COVID-19 pandemic. A weaker dollar makes gold cheaper for holders of other currencies.
The employment report on Friday showed job losses in manufacturing and construction, two sectors which have been propping up the economy. * U.S. President Joe Biden and his Democratic allies in Congress forged ahead with their $1.9 trillion COVID-19 relief package on Friday. * Capping gold’s gains, yields on the benchmark 10-year Treasury note soared to levels not seen in nearly a year. Higher yields increase the opportunity cost of holding non-yielding bullion. * Breakevens on 10-year Treasury Inflation-Protected Securities , which measure average annual inflation expectations for the coming decade, have jumped to 2.19%, the highest level since mid-2018.
Gold is considered a hedge against inflation and currency debasement, likely from widespread stimulus. * Speculators reduced their bullish positions in COMEX gold and silver contracts in the week to Feb. 2, data showed on Friday. Physical gold demand picked up in China last week ahead of the Lunar New Year festival, while Indian retail buyers cheered a sharp dip in domestic rates. Spot silver gained 1.1% to $27.12 an ounce, platinum rose 0.7% to $1,130.91 and palladium was steady at $2,336.29.
“Commodities may continue to take cues from US dollar.,” Kotak Securities said in a note.
Risk sentiment improved amid increased expectation of US stimulus as US President Joe Biden’s pushed to fast-track a $1.9 trillion stimulus package. Risk appetite improved also on improving virus situation in some region.
However, global virus cases continue to rise with concerns increasing about quick spread of virus variants and mixed economic data highlights uneven economic recovery.