Gold prices declined after a four-day surge

Gold and Silver prices declined in India declined today. On Multi Commodity Exchange, gold futures dropped by 0.32% and settled at Rs 47,857 per 10 gram after a four-day increase. Meanwhile, silver futures dipped 1% and touched Rs 68,275 per kg. In international markets, the yellow metal prices sank 0.2% and settled at $1,838.41 an ounce. Significantly, weaker than anticipated U.S. inflation data affected bullion’s appeal.

U.S. consumer prices increased moderately in January, tempering hopes for a sustained acceleration in inflation this year. The yellow metal is known as a hedge against inflation. Moreover, the 10-year Treasury yield dropped to 1.12%

Furthermore, among other precious metals, spot silver declined by 0.4% and settled at $26.89. Palladium dipped by 0.2% and touched $2,351.24.

In a speech on Wednesday, Federal Reserve Chair Jerome Powell announced the U.S. job market remains a long way from a full return. It will need more than a supportive monetary policy to manage and sustain maximum employment.

ETF interest continued to remain weak. Holdings of the world’s largest gold-backed exchange-traded fund SPDR Gold Trust dropped by 0.15% and settled at 1,146.60 tonnes.

Expectations of a U.S. aid package resume supporting gold at lower levels

According to Kotak Securities, expectations of a huge U.S. aid package resume supporting gold and silver at lower levels.

In India, gold imports in January were boosted by 72% from a year earlier, citing sources as a correction in prices from a record high drew retail buyers and jewelers.

In India, the yellow metal prices are down nearly Rs 8,000 from their August highs of Rs 56,200 per 10 gram.

Based on the Association of Mutual Funds, in India, investors put in Rs 625 crores in gold exchange-traded funds (ETFs) in January. It was 45% higher than the previous month. The inflow increased the asset base of gold funds by 22% to Rs 14,481 crore at the end of the last month. Meanwhile, at the end of December, it stood at Rs 14,174 crore.

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