Gold prices were flat on Thursday in the international markets as an elevated dollar weighed on the greenback-priced bullion and countered support from lower Treasury yields, with the metal's outlook already dulled by an aggressive Federal Reserve stance on inflation.
At 9:35am, gold contracts were marginally down by 0.08 percent at Rs 50,180 for 10 gram on the Multi-Commodity Exchange (MCX), while silver shed 0.2 percent at Rs 60,659 a kilogram.
After Fed Chairman Jerome Powell's speech, gold and silver trend remained steady while he hinted about a rate hike in Jun and July policy meetings. He also said that the supply bottleneck would keep inflation high despite higher interest rates. The US benchmark treasury yield remained volatile near 3 percent, while the dollar, which moves opposite to gold prices, rebounded after three days of selloff putting pressure on precious metals at upper levels.
The day trend in precious metals may remain range-bound to the downside and a rise in prices towards resistance levels could be a selling opportunity. Gold has resistance at Rs 50500 and support at Rs 49500. Silver has resistance at Rs 61600 and support at Rs 60000, said Nirpendra Yadav, Senior Commodity Research Analyst at Swastika Investmart.
Pritam Patnaik, Head - Commodities, HNI, and NRI Acquisitions, Axis Securities
US equity markets corrected sharply in yesterday’s day of trade, with the S&P correcting as much as 4 percent, the most significant daily decline since June 2020. To add to that, the US 10-year yields were down 10bps to 2.88%, which offered little support to gold prices.
Ideally, these are excellent conditions for a gold rally, but a strong dollar and more significantly, an extremely hawkish Fed has not only capped the rally but stalled it all together. Gold is caught in a tug of war between recessionary safe-haven demand and aggressive Fed driven inflation control drive. This leaves the bullion investor currently in a no trade zone. There is a clear negative bias in the short term, with a sell all assets mode entering the global markets.
Tapan Patel, Senior Analyst (Commodities), HDFC Securities
Gold prices traded steady on Thursday with spot gold prices at COMEX were trading near $1816 per ounce in the morning trade. The yellow metal held steady in narrow range over mixed global cues from China COVID easing and plunge in equity indices over economic growth worries. The dollar index was up on Wednesday which capped upside in gold prices. The fall in global equity indices and minor correction in dollar index may support gold prices to trade firm on Thursday.
We expect gold prices to trade sideways to up for the day with COMEX Spot gold support at $1800 and resistance at $1830 per ounce. MCX Gold June support lies at Rs 49900 and resistance at Rs 50600 per 10 grams.
Manoj Kumar Jain of Prithvifinmart Commodity Research
Gold and silver showed very high volatility and plunged again amid strength in the dollar index. Both the precious metals settled on a weaker note in the international markets. US Federal Reserve Chairman’s hawkish comments for controlling inflation and signals for raising interest rates aggressively trigged sell-off in all asset classes.
We expect both the precious metals to remain volatile in today’s session and could find support at lower levels. Gold has support at $1800-1792 per troy ounce and resistance at $1830-1844 per troy ounce while silver has support at $21.30-21.00 per troy ounce and resistance at $21.84-22.10 per troy ounce.
At MCX, gold has support at Rs 50000-49820 and resistance at Rs 50400-50580 while silver has support at Rs 60100-59600 and resistance at Rs 61220-61800. We suggest buying gold on dips around Rs 50000 for target of Rs 50550 keeping stop loss at Rs 49770 on a daily closing basis.Disclaimer: The views and investment tips expressed by experts on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.