Gold, silver prices: Gold prices edged lower on positive economic data, higher U.S. dollar

Gold prices on the Multi Commodity Exchange (MCX) opened on Monday at Rs 59,555 per 10 grams and hit an intraday low of Rs 59,425. In the international market, gold prices hovered around $1,947.24 per troy ounce, lower than the previous closing levels by 1.67 per cent.

Similarly, the Silver rate opened on Monday at Rs 71,901 per kg levels and hit an intraday low of Rs 71,741 on the MCX. The silver price in the international market is around $23.59 per troy ounce.

Last week, gold and silver prices ended in the green. After a positive decision on the U.S. debt ceiling, analysts noticed profit booking in the dollar index and a recovery in gold and silver prices. MCX Gold increased by 0.36 per cent and closed at Rs 59,587 levels; international spot gold increased by 0.07 per cent and closed at $1,947 per ounce. MCX Silver increased by 0.96 per cent and closed at Rs 71,937 levels; international spot silver increased by 1.31 per cent and closed at $23.61 per ounce.

Anuj Gupta, Vice President of IIFL Securities, said, “Fundamentally, the trend of gold and silver are sideways to up—weakness in the dollar and industrial demand in silver support silver prices. Expectations of a pause in U.S. interest rates may also support the bullion. Technically, MCX gold has immediate support at Rs 59,000 levels ($1,930) and then Rs 58,500 ($1910) levels, while resistance at Rs 60,000 levels ($1980) and then Rs 60,500 ($2100) levels. Silver has immediate support at Rs 70,500 ($23) and then Rs 69,000 ($22.30) levels, while resistance is at Rs 73,000 ($24) and then Rs 74,500 ($24.80) levels. We expect gold and silver to trade between the support and resistance levels. We recommend buying gold and silver on the support levels; gold may test Rs 60,500 levels and silver may test Rs 74,500 levels very soon.”

Adding to this, Manav Modi, Analyst, commodity and currencies, Motilal Oswal Financial Services (MOFSL), said, “Gold prices edged lower on the back of positive economic data points, higher U.S. dollar and yields, offsetting support from the prospects that the Federal Reserve would pause its rate hikes this month. Dollar index was seen closing above the 104 mark in the previous session; while U.S. 10-year yields is hovering above 3.7 per cent, weighing on safe haven assets. US Jobs market continues to remain tight as the JOLTS, ADP private payroll and the non-farm, all were reported better than expectations. U.S. nonfarm payrolls rose by 339,000 jobs last month, much higher than an expected increase of 190,000. However, the unemployment rate surged to a seven-month high of 3.7% against expectations of 3.5%. On other hand, comments from a few fed officials last week gave the market a signal for a pause in the rate hike cycle. According to CME Fed- watch tool, probability for a pause in around 75% and 25% for a 25bps rate hike in the June Fed meeting. This week focus will be on service PMI from major economies and RBI policy meeting.”