NEW DELHI: India MCX June futures fell marginally on Friday, following weakness in spot gold prices, which remained under pressure amid a strong dollar.
According to a Reuters report, the dollar stabilized near a new 20-year high that was scaled Thursday on concerns over aggressive actions by the US Federal Reserve to tame inflationary pressures.
The precious metal has lost more than 3 percent so far this week, the most in two months, the report added. It is sensitive to rising US short-term and bond yields. Any increase in interest rates also increases the opportunity cost of holding them.
At 9:30 am, June gold futures on MCX traded 0.08 percent lower against Rs 50,135 per 10 grams. However, silver futures rose 0.19% to Rs 58,865 per kg.
The June gold futures contracts settled at $1824.60 per troy ounce with a loss of 1.57 percent, and the July silver futures contracts settled at $20.77 per troy ounce with a loss of 3. .72 percent on Thursday.
Both precious metals ended up on a weaker note in the domestic markets.
“Gold and silver are trading at make-or-break levels, and if the dollar index continues to rise at the current pace, it could push precious metals downward in the coming sessions,” said Manoj Kumar Jain of Prithvi Finmart Commodity Research.
“At MCX, gold has support at Rs 50,000-49,770 and resistance at Rs 50,380-50,550 while silver has support at Rs 58,300-57,500 and resistance at Rs 59,220-6,000,” he said.
Jain suggests that traders should avoid the markets, while long-term investors can start buying in SIP mode.
Follow Gold Prices Here Trading Strategy: Expert: Pritam Patnaik, Head – Commodities, HNI & NRI Acquisitions, Axis Securities Gold prices dropped close to $48 yesterday from their high of $1,858 to $1,810, eventually reaching $1,821-22.
This can be directly attributed to the dollar index hitting its 20-year high of 104.95 yesterday. Gold is losing its haven value to a rising USD.
Ideally, a recessionary economic trend, an acceleration of the geopolitical situation in the Russo-Ukrainian war, with Russia warning of more destructive measures for aspiring NATO members, Finland and Sweden, and softer bond markets would greatly affect the gold bulls’ cause. Helped, but the reverse has happened.
We are entering another volatile session, with negative bias. This may be because the sudden correction in global stock markets has exhausted liquidity, leading to selling orders across all asset classes. In addition, the risk premium is fairly anchored in the USD, which puts further pressure on the gold price.
Expert: Sriram Iyer, Senior Research Analyst at Reliance Securities Domestic gold futures prices could start flat to weaker this Friday morning, tracking subdued overseas markets.
However, the downside could be capped amid bargains in the markets. At the same time, a weaker rupee could cover the downside. Today’s June range of MCX gold is Rs 49,900-50,700.
(with input from Reuters) (Disclaimer: Experts’ recommendations, suggestions, views, and opinions are their own. They do not represent the views of the Economic Times)
