Gold was trading higher in the Indian market on May 5 amid mixed economic data and contrasting comments from Fed officials and US treasury secretary. Silver, however, was trading higher by Rs 235 a kg.
On the Multi-Commodity Exchange (MCX), June gold futures rose 0.16 percent, or Rs 74, to trade at Rs 46,945 per 10 grams at 1029 hours. The yellow metal touched an intraday high of Rs 47,046 and low of Rs 46,920 after opening higher at Rs 46,979.
Silver July futures were trading at Rs 69,884 a kg, rising Rs 235 or 0.34 percent, while in the international market, the precious metal rose 0.21 percent to $26.61 per troy ounce.
The rise in gold prices in the international markets also supported yellow metal in the domestic market. It traded at $1780.8 per troy ounce, up 0.27 percent. The dollar index, which measures the value of the greenback against the basket of six world's major currencies, rose 0.34 percent to 91.23.
Gold and silver saw volatility on May 4. Both metals gained early in the session but slipped again from higher levels. Gold and silver settled on a weaker note in the international markets. June gold futures contract settled at $1776.00 per troy ounce with a loss of 0.88 percent and silver July futures contract settled at $26.56 per troy ounce with a loss of 1.48 percent.
Hawkish comment from US Treasury secretary Jennet Yellen on raising interest rates spooked the market in the evening session. Speaking at a webinar hosted by The Atlantic, Yellen warned that interest rates might have to rise to stop the US economy from overheating.
"It may be that interest rates will have to rise somewhat to make sure that our economy doesn't overheat, even though the additional spending is relatively small relative to the size of the economy," she said in the presentation, catching the marketplace by surprise.
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Yellen's comments were in contrast to the recent remarks of the US Federal Reserve chairman Jerome Powell that interest rates will not rise soon, Manoj Kumar Jain, Director, Head - Commodity & Currency Research at Prithvifinmart Commodity Research told Moneycontrol.
Both metals were also settled on a weaker note in the domestic markets. Gold June futures contract settled at Rs 46,871 per 10 grams with a loss of 0.95 percent and silver July futures contract settled at Rs 69,649 per one kilogram with a loss of 1.76 percent.
"Looking at the uncertainty on the US interest rates, we expect both the precious metals remain volatile in today's session ahead of the ADP non-farm payroll data. Gold is having support at $1766-1750 per troy ounce and resistance at $1788-1800 per troy ounce," Jain said.
At MCX, "gold is having support at Rs 46,600-46,380 and resistance at Rs 47,055-47,300; we suggest buying in the gold around Rs 46,700 with a stop loss of Rs 46,440 for the target of Rs 47,100," he added.
According to Ravindra V Rao, Head-Commodity Research at Kotak Securities, gold may remain volatile along with US dollar however buying interest may emerge at lower levels as Fed officials may play down tightening expectations.
"Gold steadied as market players assessed Fed's monetary policy stance amid mixed comments from Fed officials and US Treasury Secretary and mixed economic data. Amid other factors, support from persisting virus risks, inflation concerns and US stimulus measures is countered by weaker investor interest and concerns about Indian consumer demand," he said
Silver July futures traded at Rs 69,884 per kg at the MCX, rising Rs 235 or 0.34 percent, while in the international markets, the precious metal rose 0.21 percent to $26.61 per troy ounce.
"Silver is having support at $26.20-25.70 per troy ounce and resistance at $26.88-27.20 per troy ounce. At the MCX, silver is having support at Rs 69,100-68,500 and resistance at Rs 70,400-71,000," said Manoj Kumar Jain.Disclaimer: The views and investment tips expressed by experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.