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Gold prices drop near lowest in a year, buying picks up in India

New Delhi, March 15, 2021: The correction in gold prices has triggered fresh retail interest in India. This however allowed dealers to charge higher premiums. On MCX, gold futures fell to 44271 at day’s low on Friday, near a one-year low of 44,150 they touched earlier in the week. After the recent correction, gold is down about 12,000 from record highs of 56,200 hit in August last year. Even compared to the start of this year, gold is down about 6,000 per 10 gram.

Jigar Trivedi, Research Analyst- Commodities Fundamental, Anand Rathi Shares & Stock Brokers on gold, who remains positive on the precious metal, says that jewellery demand will provide support around current prices.

Dealers charged premiums of $6 an ounce over official domestic prices, inclusive of import duty and GST, compared with last week’s premium of $5, Reuters reported.

Improved sales have led to jewellers replenishing inventory, Reuters reported, citing a Mumbai-based dealer.

Rising US bond yields, rollout of covid vaccinations and prospects of faster economic recovery have put pressure on gold prices. “Gold is looking weak below 44600. However RSI is showing oversold region at 31.45 mark. Any bounce near 45400 is the shorting opportunity for the coming week, In this case, trader must follow the stop-loss of 45,800 for the target of 43,800,” said Kshitij Purohit, Product Manager, Currency & Commodities, CapitalVia Global Research Limited according to the reports published in livemint.com.

“US bond yield is increasing above 1.61% which is putting tremendous pressure on all the asses class. A stronger dollar index is also putting pressure on the gold prices, However it is suggested that do not make aggressive short position near this levels as market is oversold,” he added.

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