Gold price remains steady at record high. Silver hits new peak

Gold rate today: On account of weak US dollar and fresh wave of bank crisis in US, gold and silver price rally extended for yet another session in global and domestic market. Gold future contract for June 2023 on Multi Commodity Exchange (MCX) opened higher and went on to hit intraday high of ₹61,629 per 10 gm, which is ₹216 away from the life-time high of ₹61,845 levels that the yellow meal hit yesterday.

Silver future contract for July 2023 too, opened higher and went on to hit an intraday high of ₹78,292 per kg, which is its new life-time high on MCX.

Bank crisis in US

According to commodity market experts, gold and silver prices are rising due to weakness in the US dollar and fresh bank crisis in US that has erupted due to PacWest Bancorp and Western Alliance Bancorporation. On Thursday, PacWest Bancorp accepted that it was exploring strategic options, including a sale.

Speaking on reasons for continuous rally in gold and silver prices, Anuj Gupta, Vice President — Research at IIFL Securities said, “Gold and silver prices are in uptrend due to fresh bank crisis in US after PacWest Bancorp accepted that it was exploring strategic options, including a sale. This has sparked economic slowdown in the US economy that further weakened the US dollar, which was already under sell off stress post US Fed rate pause indication.”

Weakness in Indian rupee

Connecting the expected weakness in the Indian National Rupee with current rally and gold and silver prices, market expert Sugandha Sachdeva said, “India and Russia’s suspension of talks for bilateral trading arrangements in Indian rupees may negatively impact the rupee in the short term. The decision to suspend talks comes as India has been importing discounted oil from Russia in huge quantities. Since Russia invaded Ukraine on Feb 24, 2002, our total oil imports have swelled to $51.3 billion as compared to 10.6 billion in the same period before the invasion.”

Sugandha went on to add that the Indian currency has been trading with an appreciation bias, since finding support around the crucial 83 mark amid risk on sentiments in the markets, renewed portfolio inflows, and a decline in the dollar index towards multi-week lows.

'The US Fed has hiked interest rates by 25 bps in its latest meeting, as widely expected, and also signaled a likely pause to its aggressive monetary tightening campaign, which has suppressed the greenback. However, the banking sector woes in the US could still weigh on the market sentiments. Looking ahead, the Indian rupee faces near-term resistance at the 81.50 mark and unless that is convincingly taken out, it could again tread on the depreciating path," she said.

Gold, silver price outlook

On outlook for gold and silver, Anuj Gupta of IIFL Securities said, “Gold rate today is standing at support of ₹60,000 whereas its major support is placed at ₹59,500 levels. On the upper side gold price is facing resistance at ₹62,200 levels. Similarly, silver rate today has resistance at ₹80,000 per kg whereas in international market the resistance lies at $27 per ounce.”

Anuj Gupta said that gold price has hurdle place at $2,080 levels while it has support placed at $2,030 and $2,010 levels.

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 taking any investment decisions.