In New Delhi, the price of 22-carat gold inched up by Rs 290 to Rs 44,150 per 10 gm, while in Chennai it increased by Rs 40 to Rs 42,210. In Mumbai, the rate rose to Rs 43,680, according to the website. The price of 24-carat gold in Chennai was at Rs 46,050 per 10 gm.
Gold jewellery price varies across India, the second-largest consumer of the metal, due to excise duty, state taxes, and making changes.
"We have an economy that is recovering and inflation is materializing; that ultimately means yields have room to move higher," said Bart Melek, head of commodity strategies at TD Securities, adding that gold could fall towards $1,660 from the fallout.
Melek also noted that an unexpected jump in US nonfarm payrolls and a strong stock market were more a reflection of an improving economy and less of "critically high" inflation.
Gold is seen as a hedge against inflation. US Congressional approval of President Joe Biden's $1.9 trillion Covid-19 relief plan failed to keep the metal afloat.
Analysts also said US Federal Reserve Chair Jerome Powell's failure to address the recent surge in US yields last week further pressured gold.
Though markets have not got much pushback from the Fed on yields, few doubt the Fed is not going to act eventually and with rate hikes unlikely this year, that should support gold, said Edward Moya, senior market analyst at OANDA.
But in the near-term gold could trade between $1,650 and $1,700, with a move below $1,650 likely to invite some selling pressure, he added.
Reflective of sentiment, SPDR Gold Trust holdings, the world's largest gold-backed exchange-traded fund, fell to a
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