Amid a weakening rupee, gold prices on MCX for June futures contracts fell by Rs 275 or 0.38% to trade at Rs 71,225 per 10 grams on Monday while MCX May silver contracts were down by Rs 85 or 0.11% to Rs 80,595 per kg.
A steady U.S. dollar also made bullion less affordable for overseas buyers, while investors awaited further clues on when the U.S. Federal Reserve would deliver its first interest rate cut.
Gold June futures contract settled at Rs71,500 per 10 grams with a gain of 0.40% and silver July futures contract settled at Rs82,496 per kilogram with a gain of 0.10% last week. In the international markets, gold and silver prices plunged in an early trading session after a surge in U.S. inflation and disappointing GDP data released last week.
In the U.S. markets, spot gold fell 0.3% to $2,328.20 per ounce as of 0112 GMT. U.S. gold futures were down 0.3% at $2,339.70 per ounce.
The U.S. personal consumption expenditures (PCE) price index increased 0.3% last month, in line with forecasts, a development that is unlikely to change expectations that the Fed will hold off cutting interest rates until September, while the Fed policymakers sifting through the latest inflation data will find little to fuel a sense of urgency to cut rates, but also nothing to rule out the likelihood of rate reductions starting later this year.
Today, the US Dollar Index, DXY, was hovering near the 106 mark, rising 0.05 or 0.04%.
“We expect gold and silver prices to remain volatile this week amid volatility in the dollar, geo-political tensions and ahead of the key U.S. Fed monetary policy meetings but gold and silver could hold its support levels of $2284 and $26.40 per troy ounce respectively on a weekly closing basis. Gold has support at $2334-2322, while resistance at $2364-2380 per troy ounce and silver has support at $27.24-27.00, while resistance is at $27.80-28.10 per troy ounce in today’s session,” said Manoj Kumar Jain of Prithvifinmart Commodity Research.
Intraday Trading Strategy by Manoj Kumar Jain:
- Gold has support 71220-70950 and resistance at 71740-72100
- Silver has support at 81850-81400 and resistance at 83100-83650.
We suggest buying silver on dips around 81900 with a stop loss of 81400 for the target of 83100.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)