Gold prices took a breather after a series of gains witnessed in recent weeks. The yellow metal future contract for August 2022 ended around ₹1,000 lower from its last week highs at ₹50,603 per 10 gm levels. Spot gold price closed at 1826 per ounce levels. Taking cues from weakness in base metals’ prices, MCX silver prices corrected sharply by 1.95 last week and closed at ₹59,749 per kg levels. MCX silver price corrected by 2.57 per cent and closed at $21.11 per ounce levels.
According to bullion experts, spot gold price has immediate support at $1810 per ounce levels whereas strong support is placed at $1770 levels. Spot silver price has immediate support at $20.50 levels whereas strong support for spot silver is placed at $20 levels. On MCX, gold price has immediate support at ₹49,900 levels whereas strong support is placed at ₹49,200 per 10 gm levels. They went on to add that MCX silver price has immediate support placed at ₹58,500 levels whereas strong support for MCX silver price is at ₹56,000 levels.
Speaking on reasons for dip in gold price, Vipul Srivastava-Research Analyst at Religare Broking Ltd said, “Gold prices took a breather after a series of gains witnessed in recent weeks. The mighty dollar found the spotlight as it surged close to two-decade highs again with the central banks betting big on interest rate hikes in their battle against runaway inflation. Also, a plunge in energy prices along with industrial metals will likely provide some respite from soaring inflation, which again dented the appeal of bullion. However, worries of a global economic slowdown capped the downside in the precious metal, which gains traction as a safe haven.”
Echoing with Vipul Srivastava’s views, Anuj Gupta, Vice President — Research at IIFL Securities said, “Last week, MCX gold price corrected 0.42 per cent whereas in spot market it corrected to the tune of 0.72 per cent. Expectation of more hike in interest rates is putting pressure on gold and silver prices, however weakness in rupee due to strength in dollar is supporting for gold and silver prices. Investors are now in silent mood in this volatile session and we are not seeing any aggressive trading activity in the markets. Technically gold find support at $1810 ( ₹49,900) levels and strong support at $1770 levels ( ₹49,200) levels. Resistance at $1855 ( ₹51,300) levels and $1880 levels ( ₹52,000).”
However, Religare Broking expert maintained that gold price looks in a better shape relative to the carnage witnessed in the industrial metal complex citing, “While the US President himself has conceded in recent remarks that the rising rates could lead the economy into recession, money could be seen flowing in the yellow metal. The US GDP contracted in Q1 and is expected to slow to almost zero by the second half of the year, indicating signs of economic distress. Recent data releases from Japan, Britain, Eurozone, and the United States showed that factory activities remained muted in June across all the regions. The prevailing risk-off sentiments are likely to lift precious metal demand in the near term. Also, the dollar is finding a tough hurdle near the $105 per barrel mark after a robust rally and a pause in the same could open the gateway for gold to take charge as a safe haven asset.”
speaking on silver price outlook, Anuj Gupta of IIFL Securities said, “Silver price is taking cues from weakness in base metals’ prices as lower demand expectation due to fear of the recession. Silver can find support at $20.50 ( ₹58,500) levels and next support at $20.00 ( ₹56,000) levels. Resistance at $21.50 ( ₹62,500) levels and $22.00 ( ₹64,000) levels.”
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint.