Gold prices in the global markets dipped, which may lead to a further fall in gold rates in India. Gold prices fell as data showed a faster-than-expected growth in China's factory activity, which weighed on the metal's safe-haven appeal. Apart from this a surge in U.S. Treasury yields added further pressure on the precious metal.
Spot Gold was down 0.1% to $1,682 per ounce, while US gold futures were flat at $1,686 per ounce.
U.S. 10-year Treasury yield rose as far as 1.776% on Tuesday, its highest since Jan. 22.
Meanwhile, gold for 22 karats has been retailing at Rs 41,700 for 22 karats, which is down almost Rs 500 in a week's time. In Mumbai gold was retailing at Rs 42,980 per 10 grams for 22 karats. All of the cities saw gold rates lower on Tuesday and a soft opening on Wednesday is also likely.
Much of the movement for gold would now depend on the movement of US treasury yields. If US treasury yields keep rallying we might see a further drop in gold prices.
Many analysts believe that after a near 20 per cent drop in prices in India, gold may now be a gold buying opportunity even as equities have rallied sharply.