In India on the MCX gold future for April delivery went down by 1.27% or Rs. 577 to below Rs. 45000 at Rs. 44971 per 10 gm. This was in line with movement of gold rates internationally which receded down to nine month low levels.
The drop in gold price is also the result of rupee's firmness against the dollar.
Silver also shed a huge Rs. 1413 for the March delivery and was down to Rs. 65926 per kg.
On Thursday, there has been respite in the prices, though higher US yield continue to weigh. As per a Reuters report, Spot gold was up 0.2% at $1,714.27 per ounce by 0051 GMT.
The US yield remained at levels of 1.5%, reducing the appeal of the non-interest rate yielding bullion.
On Wednesday, the US Federal Reserve reported that the US economy in the first few weeks of the year registered modest recovery. Further, this rise in us treasury yield is being viewed as a reflection of the improvement in the economy.
We may witness prices to test new support levels in the range of $1,710-$1,700 and on the upside prices may get challenged in the range of $1,740-$1,750 levels. MCX gold has been trading with negative bias with support placed at Rs 45,000-Rs 44,900 levels. A minor rise in prices could be witnessed in the upcoming session where levels of Rs 45,250-Rs 45,300 could be tested after which bearish momentum is likely to continue, views Kshitij Purohit, Product Manager, Currency & Commodities, CapitalVia Global Research Limited