New Delhi [India], July 11 : Current bullion market is focusing on a combination of factors which includes direction of US interest rates, weakness in USD, among many others factors for further guidance, noted a recent report by Emkay Wealth Management.

The direction of US interest rates, which as of now is unclear about its likely impact on the tariffs on the US retail prices, which means that one of the major triggers for gold is absent.

While the second major factor could be the weakness in the US Dollar against other currency majors. This can happen only with a sustained fall in the US Dollar yields and interest rates, the report said.

Gold and the US dollar usually have an inverse relationship. Whenever dollar weakens, gold becomes cheaper for other currencies, increasing demand and often impacts its price, and vice-versa.

However, the strength in the dollar and firming US bond yields over the last two weeks have added downward pressure on the gold prices. The report sees technical support for gold at USD 3,297 and USD 3,248.

"What we need to see is a further fall in the Dollar caused by official rate cuts and a fall in market yields. There is a strong view that with the new budgeted spends to the tune of USD 4.60 trillion, the situation could become murkier because the resultant borrowings may put upward pressure on the yields," Emkay Wealth Management said.

Along with that, a pattern of consolidation is currently being observed in the gold market, which typically leads to an increase in gold prices.

The report further adds that, earlier this year, gold prices went up due to buying from China. However, towards the end of April and the beginning of May, when China reported a sell-off, that factor later became unnecessary in the bigger picture.