Gold and silver prices in India crashed on the Multi Commodity Exchange on Thursday amid heavy selling, following overnight losses in global bullion prices after the US Federal Reserve signalled interest rate hike later this year. However, the signing of the interim US-Iran peace deal eased inflation concerns and supported the precious metal prices.
MCX gold rate for August futures contracts opened lower by ₹1,573, or 1%, at ₹1,52,306 per 10 grams as against its previous close of ₹1,53,879 level.
MCX silver price for July futures contracts opened lower by ₹3,807, or 1.51%, at ₹2,48,000 per kg, as compared to its previous close of ₹2,51,807 level.
During the early session, MCX gold price declined as much as ₹1,575, or 1.02% to a low of ₹1,52,304 per grams level, while MCX silver price dropped as much as ₹6,298, or 2.5% to a low of ₹2,45,509 per kg.
In the international market, gold prices rose more than 1%, recouping losses from the previous session, as a drop in oil prices following a US-Iran interim agreement dampened inflation expectations and supported bullion.
Spot gold price rose 1.4% to $4,316.42 per ounce, after declining 1.7% on Wednesday. US gold futures for August delivery fell 1% to $4,336.70. Spot silver price rose 1.8% to $69.18 per ounce
The United States and Iran released the text of their interim agreement. The 14-point agreement extends the ceasefire announced in April by another 60 days to allow the two sides to negotiate a final truce.
Meanwhile, the US Federal Reserve announced its decision to leave the policy rate in its current 3.50%-3.75% range. However, nine of the central bank’s 19 policymakers now believe they will need to raise the policy rate this year.
According to the CME FedWatch Tool, traders now see an 85% chance of a US rate hike in December, jumping from 61% prior to the Fed decision.
Gold tends to lose appeal when rates are high, as it does not yield interest.
Gold Rate Outlook
Jigar Trivedi, Senior Research Analyst at IndusInd Securities said that the outlook of MCX gold rate remains weak with support seen at ₹1,51,800 level and resistance placed at ₹1,53,300 level.
Silver Rate Outlook
According to Trivedi, the outlook for silver prices also remains weak, but expects short-covering during the day.
“MCX silver price has support at ₹2,42,000 level and resistance is seen at ₹2,51,000 level,” he said.
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