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Gold prices struggled for the fourth day in a row in Indian markets as futures on MCX fell 0.3% to ₹50,610 per 10 gram, tracking decline in global rates. Silver futures on MCX slumped 1.3% to ₹60,494 per kg. In four days, gold fell about ₹500 as the precious metal remained in a narrow range. In global markets, gold eased 0.3% to $1,827.03 per ounce as the US dollar hovered near two-decade highs. A firm dollar makes greenback-priced bullion more expensive for buyers holding other currencies.
Among other precious metals, spot silver dipped 1% to $21.45 per ounce, platinum fell 0.7% to $930.91, and palladium dropped 0.8% to $1,862.40.
Gold has seen directionless trade in last few days and this may continue as monetary policy stance of Fed and other central banks is assessed, say analysts. Global growth worries and inflation concerns have limited downside for gold but Fed’s stance may keep US dollar supported and this may weigh on gold prices.
Gold traders will be eyeing Fed chairperson Jerome Powell's testimonies in Washington DC this week. Earlier this month, the Fed delivered a 75 basis point (bps) rate hike and is expected to again sharply hike rates in July. Higher interest rates and bond yields increase the opportunity cost of holding gold, which yields nothing.
“COMEX gold trades modestly lower near $1830/oz weighed down by gains in US dollar index as market players position for Fed Chairman’s testimony later today. Fed Chair is likely to reiterate the need for aggressive monetary tightening until inflation comes under control. ETF outflows and some correction in crude oil and commodity prices is also weighing on gold," said Ravindra Rao, Head Commodity Research at Kotak Securities.
According to Rahul Kalantri, VP Commodities, Mehta Equities Ltd, “gold prices have support at $1820-1808, while resistance is at $1852-1861. Silver has support at $21.20-20.95, while resistance is at $21.85-21.95. In rupee terms, gold has support at ₹50,440–50,110, while resistance is at ₹50,980–51,240. Silver has support at ₹60,420-59,550, while resistance is at ₹61,580–61,910."
“Hopes of an aggressive interest rate hike plan of the U.S. Federal Reserve in its next policy meetings supported the U.S. dollar and restricted gains of precious metals. Downbeat U.S. existing home sales numbers and higher than expected Canadian consumer inflation data also supported precious metals," he added.
