Gold and silver prices in India opened higher on the Multi Commodity Exchange (MCX) on Tuesday, following gains in global bullion prices, as investors opted for buying at lower levels.
MCX gold rate for August futures contracts opened 0.45% higher at ₹1,40,949 per 10 grams as against its previous close of ₹1,40,309 level. MCX silver rate for September futures contract opened 0.28% higher at ₹2,18,333 per kg as compared to its previous close of 2,17,718 level.
In the international markets, gold prices rose after hitting a two-week low earlier in the session, as markets awaited key US inflation data.
Spot gold price rose 0.3% to $4,013.93 per ounce, recovering from its lowest level since July 1. US gold futures for August delivery gained 0.4% at $4,020.80. Spot silver prices eased 0.1% to $57.60 per ounce, having earlier touched a two-week low.
However, escalating US-Iran war lifted crude oil prices higher and reinforced expectations of further interest rate hikes by the US Federal Reserve, keeping sentiment weak for bullion.
In the previous session, gold rates slipped about 3% in its biggest daily percentage decline in more than a month. The fall in gold prices intensified after continued fighting between the US and Iran led to a surge in oil prices to one-month highs.
While gold is often viewed as a hedge against inflation, higher rates tend to weigh on the non-yielding metal by increasing the appeal of interest-bearing assets.
Meanwhile, investors will watch out for US CPI data for June due later in the day for fresh clues on inflation and the Fed’s policy path, with PPI data and Fed Chair Kevin Warsh’s first semi-annual testimony before Congress this week also in focus.
Fed Governor Christopher Waller said that the US central bank may need to raise interest rates “in the near term” if coming data show inflation continuing well above the 2% target, Reuters reported.
According to CME Group’s FedWatch Tool, the probability of September US Fed rate hike has risen to around 76% from 57% a week ago.
Gold, Silver Rate Outlook
Manoj Kumar Jain of Prithvifinmart Commodity Research expects gold and silver prices to remain volatile this week amid volatility in the crude oil prices and volatility in the dollar index and geo-political tensions.
“Gold price has support at $3,955 – $3,910, while resistance at $4,040 – $4,085 per troy ounce and silver price has support at $56.00 – $54.40, while resistance is at $59.10 – $60.60 per troy ounce in today’s session,” said Jain.
According to him, MCX gold price may find support at ₹1,39,100 – ₹1,37,700 levels, and resistance at ₹1,41,400 – ₹1,42,200 zone. MCX silver price has support at ₹2,1,6000 – ₹2,12,400 levels and resistance at ₹2,20,000 – ₹2,22,500 zone.
“We suggest traders must avoid long positions in gold and silver but long-term investors could accumulate in SIP mode in this market fall,” said Jain.
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.
