Gold prices in India dipped today for second day in a row despite positive global cues. On MCX, gold futures fell 0.12% to Rs 48,250 per 10 gram while silver future slumped 0.9% to Rs 72,540 per kg. In international markets, gold prices were flat near a four-month high, ahead of the release of minutes from the US Federal Reserve’s last policy meeting.
Gold traders are likely to look for more clues on policymakers’ view on inflation. Spot gold in global markets was flat at $1,866.54 per ounce after hitting $1,874.80 in the previous session. The Fed minutes due later today may offer more insight into how policy makers view price pressures, and any hints of a timeline for tapering stimulus. MCX gold has support at Rs 46360 and resistance at Rs 49,400.
The US dollar index was flat near a three-month low against its rivals, making gold less expensive for other currency holders.
In global markets, gold rates have risen more than 10% after falling to a nine-month low in early March. A retreat in US dollar and inflation expectations has supported the rebound in gold. Concerns over rising inflation intensified after U.S. consumer prices in April rose 4.2% on-year, the fastest increase in more than a decade. Gold is often seen as a hedge against inflation.
Among other precious metals, silver today fell 1% to $27.93 per ounce while platinum eased 0.3% to $1,215. The rebound in gold has also been helped by resumption of inflows into bullion-backed exchange-traded funds or gold ETFs.
Many analysts still maintain a positive outlook on gold amid easy monetary policy stances by central banks across the world. Weighing on price is concerns about consumer demand in India as virus related restrictions hamper economic activities.