Gold and silver rates declined on the MCX on Monday (29 June) morning as a fresh escalation in US-Iran tensions drove oil prices higher, stoking concerns about inflation that could prompt the US Federal Reserve to tighten monetary policy.
MCX gold August futures were 0.40% down at ₹1,43,583 per 10 grams, while MCX silver September contracts were 0.26% down at ₹2,22,899 per kg around 9:15 am.
There were fresh strikes between the US and Iran over the weekend. As per media reports, the US military carried out strikes on Iran, terming it a response to alleged Iranian drone attacks on vessels near the Strait of Hormuz.
Meanwhile, a senior US official told Axios that the US and Iran have reportedly agreed to back down and stop attacking each other.
Oil price benchmark Brent crude rose by more than half a per cent to trade above $72 per barrel.
The dollar index remained elevated on the prospects of US Fed rate hikes, keeping gold prices under pressure.
The dollar is set to see its biggest monthly gain in nearly a year in June, as the US-Iran conflict boosts expectations of Federal Reserve interest rate hikes and safe-haven demand.
According to the CME FedWatch Tool, quoted by Reuters, traders expect as many as three Fed rate hikes this year.
“Gold prices declined as fresh exchanges of attacks between the US and Iran over the Strait of Hormuz lifted oil prices and rekindled inflation concerns. Markets are now awaiting the latest US monthly jobs report and the ISM Manufacturing PMI for further clues on the US Fed monetary policy,” said Jigar Trivedi, Senior Research Analyst at IndusInd Securities.
Gold and silver: Key levels to watch
Trivedi expects MCX gold August futures to drop to ₹1,43,800 per 10 grams amid weak global sentiment.
Manoj Kumar Jain of Prithvifinmart Commodity Research believes gold has support at $4,055 and $4,010, while resistance is at $4,135 and $4,180 per troy ounce, and silver has support at $57.40 and $55.80, while resistance is at $61.20 and $62.80 per troy ounce in today’s session.
On the MCX, Jain believes gold has support at ₹1,43,300 and ₹1,42,400 and resistance at ₹1,45,150 and ₹1,46,200, while silver has support at ₹2,20,000 and ₹2,16,600 and resistance at ₹2,26,000 and ₹2,29,100.
“We suggest buying gold on dips until it holds ₹1,41,400 on a closing basis and book profits around ₹1,46,000 and ₹1,46,600, and buying silver on dips until it holds ₹2,14,400 on a closing basis and booking profits around ₹2,29,000 and ₹2,31,000,” said Jain.
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Disclaimer: This story is for educational purposes only and does not constitute investment advice. The views and recommendations expressed are those of individual analysts or broking firms, not Mint. We advise investors to consult with certified experts before making any investment decisions, as market conditions can change rapidly and circumstances may vary.
