Gold Prices Today: Strong US dollar, high treasury yields to cap yellow metal gains, resistance around Rs 51,210–51,550

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Gold prices edged lower on Friday in international markets and looked set to fall for a third straight week, weighed down by a robust dollar and rising yields, while investors await the US jobs report to assess its impact on monetary policy. Spot gold fell 0.4% to $1,869.26 per ounce, as of 0137 GMT, while US gold futures slipped 0.4% to $1,869.10. Bullion has declined about 1.5% so far this week.

At 9:37 AM, gold contracts were up 0.15 percent at Rs 50,975 for 10 grams on the Multi-Commodity Exchange (MCX), while silver added 0.22 percent at Rs 62,471 a kilogram.

Gold and silver prices gained after US Fed chair Jerome Powell assured the central bank will not hike interest rate by 0.75% in the next policy meeting. However, the Bank of England increased the interest rate by 0.25% to a 13 year high. Macroeconomic data across major economies has started showing a clear sign of slowdown due to a hike in interest rates. However, a strong US dollar index and treasury yield put pressure on precious metals prices at higher levels. Gold has resistance at Rs 51700 and support at Rs 50800. Silver has support at Rs 62000 and resistance at Rs 64400, said Nirpendra Yadav, Senior Commodity Research Analyst at Swastika Investmart.

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We witnessed a rollercoaster ride in gold and silver prices on May 5. Gold prices pulled back after rising as much as 2% following half-a-point interest rate hike announcement by the US Federal Reserve, the biggest in 22 years. In international markets, gold future settled at $1875 after scaling a high of $1907 while silver settled at $22.49 after touching a high of $23.27. In the domestic market, gold ended at Rs 50909, up by 0.59%, and silver settled at Rs 62342, up 0.32%. The jump in gold price came after the Bank of England warned Thursday that Britain risks a double-whammy of a recession and inflation above 10%. Bullion lost all its gains after BoE hiked interest rates by a quarter percentage point to 1%.

Today, trading in bullion will be volatile. Gold has support at $1855-1840 and resistance at $1892-1907. Silver has support at $22.05-21.80, while resistance is at $22.62-22.80. In rupee terms, gold has support at Rs 50,650–50,310, while resistance is at Rs 51,210–51,550. Silver has support at Rs 61,800-61,500, while resistance is at Rs 62,850–63,410.

Gold prices are rising on weaker equities and geopolitical tensions, facing headwinds from the rate hike from Fed. On technical setup, gold is showing strength in volume terms and may be in uptrend next week.

Buy zone near Rs 50700 for target of Rs 51000

Sell zone below Rs 50650 for target of Rs 50350

As per technical chart gold and silver are trading in oversold zone and anytime we can see a huge short-covering rally. Momentum indicator RSI is also indicating the same on hourly and daily charts. Traders are advised to create fresh buy positions near given support levels and should focus on important technical levels.

June Gold closing price Rs 50899, Support 1 - Rs 50700, Support 2 - Rs 50500, Resistance 1 - Rs 51100, Resistance 2 - Rs 51300.

July Silver closing price Rs 62336, Support 1 - Rs 61800, Support 2 - Rs 61200, Resistance 1 - Rs 62900, Resistance 2 - Rs 63500.

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