Gold s price remains stable near a five-month low due to increasing indications that US interest rates will stay high for a longer time. The 10-year Treasury yield is continuing to rise, suggesting that bondholders are preparing for tight monetary policy, which tends to negatively impact gold since it doesn t generate interest.
Gold futures are down 2% or Rs 1,193 on the month-to-date basis while up 6.10% or Rs 3,358 on the year-to-date basis, Anuj Gupta, Head Commodity & Currency at HDFC Securities told ETMarkets. As for Silver futures, the declines are to the tune of 6.88% or Rs 5,192 in August while the gains this year stand at 1.18% or Rs 822, he said.
Gold has been losing its appeal as a safe haven on inflationary fears and continuance of a higher interest rate regime in the US for much longer than anticipated, commodity and currency expert Anuj Gutpa said. This is strengthening the dollar index while raising bond yields, he said, expecting gold and silver to trade sideways next week amid strong resistance at higher levels. Gupta is Head Commodity & Currency at HDFC Securities.