Gold, silver futures gain up to 1.2%. Here’s what analysts said

NEW DELHI: Gold and silver futures rose in Monday’s trade on optimism over a stimulus package passed by the US Senate. The gains in gold, however, were capped amid recent ETF outflows. An upbeat US payrolls data also lowered gold’s safe haven appeal.

Gold futures for April delivery rose 0.10 per cent to Rs 44,729 per 10 grams. Silver futures for May delivery were trading at Rs 66,420 per kg, up 1.25 per cent.

SMC Global said that gold prices bounced back on Monday from a nine-month low, as the dollar softened, while passage of a long awaited US coronavirus stimulus package boosted the bullion’s appeal as a hedge against inflation.

“Improved sentiment from the passing of the $1.9 trillion stimulus and a dip in the US dollar index are helping gold prices. Gold may find support near Rs 44,400 and resistance near Rs 44,900. Silver (May) may trade with higher volatility where it may find support near Rs65,400 and resistance at Rs 66,700,” the brokerage said.

Ravindra Rao of Kotak Securities said that while gold edged up on back of progress on the US stimulus, weighing on price is continuing ETF outflows, upbeat non-farm payrolls data and higher US and global bond yields.

“Gold has bounced back above $1,700/oz and may see extended gains on US stimulus optimism however a sharp rise is unlikely unless US bond yields correct sharply,” he said.

The US Senate on Saturday passed President Joe Biden’s $1.9 trillion Covid-19 relief plan, with the final bill including $400 billion in one-time payments of $1,400 to many Americans. US 10-year yields, easing from an over one-year peak hit on Friday, also provided support.

Holdings of the world’s largest gold-backed exchange-traded fund, SPDR Gold Trust fell to a 10-month low on Friday.

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