Gold Prices Today: Strong dollar to cap yellow metal gains; inflation, recession fears to lend support

Gold, gold prices

Gold was trading lower in the morning trade in Indian markets on July 14 on weak global cues, with the bullion outlook hurt by fears that the US Federal Reserve could go for a more aggressive interest rate hike to fight sky-rocketing inflation.

At 9.27 am, gold contracts were trading 0.22 percent lower on the Multi-Commodity Exchange (MCX), at Rs 50,690 for 10 grams and silver was down 0.42 percent at Rs 56,887.

In the international market, spot gold fell 0.2 percent to $1,731.19 an ounce at 0312 GMT. US gold futures dropped 0.5 percent to $1,727.30, as benchmark US 10-year treasury yields rose, weighing on the appetite for zero-yield gold.

US inflation for June was higher than expected, raising fears of another big interest-rate hike by the Federal Reserve later this month.

The consumer price index (CPI) rose 9.1 percent from a year earlier in a broad-based advance, the largest gain since the end of 1981, data showed on July 12. The widely followed inflation gauge increased 1.3 percent from a month earlier, the most since 2005, reflecting higher gasoline, shelter and food costs, Bloomberg reported.

Also read: Hot inflation fuels bets on supersized Fed rate hike

The US dollar, which moves opposite to gold, fell 0.47 percent as inflation reached a 41-year high. Rising inflation amid a rising interest rate scenario increases the concern of recession and supports gold prices.

Bullion prices may see selling pressure near resistance levels. Gold has resistance at Rs 51,050 and support at Rs 50,500. Silver has resistance at Rs 57,500 and support at Rs 56,000, said Nirpendra Yadav, Senior Commodity Research Analyst at Swastika Investmart.

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Tapan Patel, Senior Analyst (Commodities), HDFC Securities

Gold prices traded steady on July 14, with Comex spot gold trading near $1,730 an ounce in the morning trade. The yellow metal witnessed recovery after US inflation data despite a stronger dollar.

The US CPI rose to 9.10 percent in June year-on-year basis. The higher inflation numbers spurred some buying in gold over recession fears, with the market discounting a higher rate hike from the Fed in the next meeting.

We expect gold to trade sideways to up for the day, with Comex spot gold support at $1,720 and resistance at $1,745. MCX August gold support lies at Rs 50,500 and resistance at Rs 51,100.

Also read: Rupee hits fresh record low for 4th straight session

Rahul Kalantri, VP Commodities, Mehta Equities

Gold and silver again saw high volatility on July 12 and slipped in the early trading session after US inflation rose higher than expected.

Gold prices hit an 11-month low and silver, too, dropped to a two-year low as US inflation surged to a 41-year high.

Gold has support at $1,720-1,708, while resistance is at $1,740-1,751. Silver has support at $18.85-18.55 and resistance is at $19.45-19.62.

In rupee terms, gold has support at Rs 50,550–50,320, while resistance is at Rs 50,960–51,140. Silver has support at Rs 56,550-55,750 and resistance at Rs 57,580–57,910.

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