Gold and silver prices surrendered all of their intraday gains in Thursday’s trade, 6 August, as investors booked profits following the recent rally driven by easing concerns over inflation and US interest rates amid signs of de-escalating tensions in the Middle East.
After climbing to a six-week high of $4,363 per troy ounce, Comex gold futures erased all of their gains, slipping back to around $4,290. Silver futures also retreated to $61.12 per troy ounce after touching the $63 mark earlier in the session, their highest level in over a month.
Meanwhile, the US dollar index rebounded, adding pressure on precious metals by making dollar-denominated assets more expensive for holders of other currencies. The dollar index edged higher to 99.8 after falling to a seven-week low earlier this week.
The precious metals had rallied over the past few sessions as hostilities between the US and Iran showed signs of easing, raising hopes of an end to the five-month-long conflict and reducing concerns over disruptions to global crude oil supplies.
Iran has reportedly entered the final stage of drafting an agreement with Oman on reopening the Strait of Hormuz, according to the Associated Press. On Wednesday, Iranian Foreign Ministry spokesperson Esmail Baqaei said discussions were progressing positively at both the technical and political levels.
Meanwhile, ADP data showed the US economy added just 44,000 private-sector jobs in July, the weakest reading since January and well below market expectations of 70,000. Following the data, traders trimmed expectations of a September Federal Reserve rate hike, with the implied probability falling to 57% from 67% a day earlier.
However, Federal Reserve Governor Lisa Cook reiterated on Wednesday that she remains prepared to support higher interest rates if inflation fails to cool, warning that policymakers may not have the luxury of waiting to bring inflation back to the central bank’s 2% target.
The Federal Reserve last week left its benchmark interest rate unchanged at 3.50%-3.75% for a fifth consecutive meeting, although three policymakers dissented in favour of a 25-basis-point rate hike.
Market participants are now awaiting the US nonfarm payrolls report, which is expected to provide fresh clues on the strength of the labour market and the Federal Reserve’s policy path.
MCX gold slips from ₹1.50 lakh; silver turns negative
In the domestic market, the near-month MCX gold futures contract eased to ₹1,48,500 per 10 grams after briefly crossing the ₹1.50 lakh mark for the first time since June 18. Despite the intraday pullback, the yellow metal has still gained ₹5,578 over the past two trading sessions.
Meanwhile, MCX silver futures also erased all of their intraday gains and slipped into negative territory, falling to ₹2,24,322 per kg, down ₹4,075 from the day’s high of ₹2,28,397 per kg.
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