Gold and silver prices today: Yellow metal hovers near 3-month lows

Gold prices on the Multi Commodity Exchange (MCX) opened on Wednesday at a price of Rs 58,176 per 10 grams and hit an intraday low of Rs 58,155. In the international market, prices hovered around $1,921.11 per troy ounce. Meanwhile, silver opened on Tuesday at Rs 69,569 per kg and hit an intraday low of Rs 69,435 on the MCX. The price hovered around $22.96 per troy ounce in the international market.

Last Wednesday, gold prices on the MCX opened at a lower price of Rs 58,824 per 10 grams and hit an intraday low of Rs 58,776. In the international market, prices hovered around $1,937.26 per troy ounce. Meanwhile, silver opened at Rs 70,347 per kg and hit an intraday low of Rs 70,302 on the MCX. The price hovered around $23.11 per troy ounce in the international market.

Anuj Gupta, Vice President of IIFL Securities, said, “Yesterday gold prices closed lower by 0.54% at 58,085 levels expectation of an increase in interest rates and positive US Consumer confidence data. However, safe-haven demand is providing support to the bullions. Yesterday US consumer confidence came on a positive note, so we saw profit booking in gold from higher levels. FOMC also indicates that the target of 2% inflation is still far and will take time to achieve. In the international market, it is trading at $1,915 levels per ounce."

He sees technically strong support at 57700 levels and then 57400 levels, resistance at 58300 and then 58700 levels. For today, one can sell around 58300-58400 levels with a stop loss of 58700 and for the target of 57700 to 57500 levels. Gold may test $1910 to $1905 levels in international markets.

Gold prices hovered near three-month lows as better-than-expected economic data from the US supported the rate hike dialogue. Yet, traders awaited cues from Federal Reserve Chair Jerome Powell and more economic data for clarity on the path ahead in terms of rate hikes.

Manav Modi, Analyst, Commodity and Currencies, MOFSL, said, "The US consumer confidence increased on labour market optimism in June, while new single-family home sales rose more than expected in May. The U.S. core durables goods orders data was also reported better than expectations. These positive economic data points justified fed officials' comments regarding possible rate hikes in future red meetings. Market participants expect a 77% chance of a rate hike in July, according to CME’s Fedwatch tool. Focus now shifts to personal consumption expenditure (PCE) price index data for May, first quarter GDP data, and weekly jobless claims for the week ended June 23. Comments from Fed, ECB and BOE governors will also be important to keep an eye on."

Invest in gold for the longer term 

Gold is an excellent portfolio diversifier and a hedge against uncertain times. In India, gold has given around 12% CAGR return in the last 25 years. If this historical return continues going forward, the money invested in this Sovereign Gold Bond can double in the next 8 years if one holds it till expiration.

Prithviraj Kothari, MD and CEO of RiddiSiddhi Bullions Limited(RSBL), said, "Gold prices were trading around Rs 4,000/ 10 gm in the spot market in 1998, and now, after 25 years, gold prices are around Rs 62000 in the spot market in 2023. This translates to an 11.6% CAGR return in 25 years. Similarly, gold prices were trading around Rs 5600/10 gm in 2003, so it yielded a 12.8% CAGR return in the last 20 years. If somebody had bought physical gold 20–25 years ago and held it for the long term, it would have yielded around 12% of the CAGR return. Capital Gains Tax has to be paid when gold is sold, not on the buying side. The appreciation in Indian gold prices is due to three factors: appreciation in international gold prices, depreciation in USDINR, and increased import duty & taxes."