Gold futures on
were trading lower by 0.56 per cent or Rs 283 up at Rs 49,890 per 10 gram. However, silver futures tumbled about 0.87 per cent or Rs 584 at Rs 60,622 per kg.
A weaker dollar makes gold more attractive for buyers holding other currencies. Bullion is seen as a safe haven during economic crises and a hedge against inflation.
Asian shares edged higher despite data reinforcing investor fears the global economic recovery may be more fragile than expected, even as inflationary pressures remain high.
Ravindra Rao, CMT, EPAT, VP- Head Commodity Research at Kotak Securities, said gold trades were weighed down by a pause in the recent slide in US dollar index following hawkish comments from Fed Chairman Jerome Powell.
“ETF outflows also showed continuing exodus by investors. However, supporting prices are increasing growth concerns, inflation concerns and persisting Russia-Ukraine tensions,” he added.
In the spot market, highest purity gold was sold at Rs 50,593 per 10 grams while silver was priced at Rs 61,302 per kg on Tuesday, according to the Indian Bullion and Jewellers Association.
The spot prices of gold have remained below Rs 51,000 for the straight third session, whereas silver has dropped about Rs 2,200 per kg in just one session in the spot market.
With the global economy in focus after weak economic data from China highlighted worries about the prospects for a global slowdown, the dollar index weakened, pushing gold prices higher, said Ravi Singh, Vice President and Head of Research, ShareIndia.
“However, U.S. Treasury yields climbed, limiting demand for gold. Gold prices may remain sideways this week,” he added.
“We expect gold prices to trade sideways to down for the day with COMEX Spot gold support at $1,790 and resistance at $1,830 per ounce. MCX Gold Gold June support lies at Rs 49,800 and resistance at Rs 50,600 per 10 gram,” Tapan Patel, Senior Analyst (Commodities),