Gold Prices Today: Precious metals to stay volatile ahead of US inflation data

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Gold prices fell on Tuesday in the international markets as Treasury yields and the dollar gained ahead of the US inflation data, a reading that could help investors get more idea about the Federal Reserve's monetary policy stance.

On the Multi-Commodity Exchange (MCX), gold contracts were up 0.67 percent, trading at Rs 52,529 for 10 grams at 9.28am, while silver jumped 1.14 percent at Rs 68,064 a kilogram.

Gold and silver prices rose in the previous trading session amid fear of rising inflation appealing a safe haven. Chinese CPI data rose to 1.5 percent which supported the prices of precious metals. US dollar index traded down, however it rebounded after US market hours and witnessed profit booking in precious metals. Strong bond yield also capped the gain of precious metals.

Gold has support at Rs 52,000 and resistance at Rs 52,800. Prices of precious metals are likely to remain supportive at lower levels, said Nirpendra Yadav, Senior Commodity Research Analyst at Swastika Investmart.

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Gold and silver prices posted moderate gains on Monday, but prices have backed down from their early-session highs on some profit taking by the shorter-term futures traders. Gold and silver prices rose amid rising bond yields and a sell off in the crude oil market. The Russia-Ukraine war is in its seventh week amid no signs of any ceasefire.

The COVID pandemic continues to surge in China, which has once again clouded the growth outlook for the world’s second-largest economy and inflation worries are supporting gold silver prices. Today, all eyes will be on the US consumer price index report for March, which is expected to come in hot at up 8.4 percent, year-on-year.

Gold has support at $1938-1922, while resistance is at $1965-1980. Silver has support at $24.72- 24.55, while resistance is at $25.25-25.48. In rupee terms, gold has support at Rs 51,880–51,650, while resistance is at Rs 52,440–52,610. Silver has support at Rs 67,570- 67,210 while resistance is at Rs 68,690–69,070.

Gold and silver showed very high volatility on Monday amid strength in the dollar index and the US bond yields. Both the precious metals settled on a mixed note in the international markets. Gold June futures contract settled at $1948.20 per troy ounce with a loss of 0.01 percent, while silver May futures contract settled at $24.99 per troy ounce with a gain of 0.31 percent. Due to weakness in the rupee both the precious metals settled on a positive note in the domestic markets.

We expect both the precious metals to remain volatile in today’s session ahead of the US inflation data and continue to hold their support levels. Any decline in the prices would be a buying opportunity in both the precious metals. Gold has support at $1934-1922 per troy ounce and resistance at $1960-1974 per troy ounce while silver has support at $24.70-24.55 per troy ounce and resistance at $25.20-25.55 per troy ounce.

At MCX, gold has support at Rs 520,00-51,770 and resistance at Rs 52,480-52,770 while silver has support at Rs 66,900-66,660 and resistance at Rs 67,700-68,200. We suggest buying gold around Rs 52,080 with a stop loss of Rs 51,770 on a closing basis for target of Rs 52,660 and silver around Rs 67,000 with a stop loss of Rs 66,500 on a closing basis for target of Rs 68,200.

Gold prices are expected to outperform even after the current war tension settles as due to the after-effects of war, higher commodities prices and soared inflation, the world would see some sort of recession zone where gold would be the preferred asset above all.

Buy zone near Rs 52,000 for target of Rs 52,300

Sell zone below Rs 51,800 for target of Rs 51,600

Gold and silver prices showed upside movement on April 11. On the Multi-Commodity Exchange (MCX), June gold contracts closed up by 0.21 percent at Rs 52,179 for 10 grams while May silver futures closed at Rs 67,294 a kilogram, up 0.45 percent. Yesterday June gold made a low of Rs 52,021 and then made a high of Rs 52,740. Silver made a low of Rs 66,908 and then made a high of 68,480.

As per technical chart, gold and silver are showing some short covering, momentum indicator RSI is also indicating the same on the hourly as well as daily chart. So traders are advised to create fresh buy positions near given support levels, traders should focus important technical levels.

June Gold closing price Rs 52179, Support 1 - Rs 52100, Support 2 - Rs 51800, Resistance 1 - Rs 52400, Resistance 2 - Rs 52600.

May Silver closing price Rs 67294, Support 1 - Rs 67000, Support 2 - Rs 66400, Resistance 1 - Rs 67700, Resistance 2 - Rs 68500.