Gold and silver prices today: Yellow metal hovers around one-month lows as bond yields and dollar index rise

Gold prices opened on the Multi Commodity Exchange (MCX) on Tuesday at Rs 59,321 per 10 grams and hit an intraday low of Rs 59,295. In the international market, prices hovered around $1,925.10 per troy ounce. Meanwhile, silver opened at Rs 70,593 per kg and hit an intraday low of Rs 70,552 on the MCX. The price hovered around $22.78 per troy ounce in the international market.

Yesterday, spot gold closed with a loss of 0.57% at $1925.26 falling in tandem with other commodities on disappointing China trade balance data for July that showed that China's domestic and global demand was weak. The rating agency Moody's downgrading the U.S. regional banks further pressured the commodities. Nearly ten mid-sized U.S. banks were downgraded as six other major banks have been kept on a negative watch list. Italy's right-wing populist government imposed a 40% tax on any additional profits of the banks, which is limited to fiscal year 2023.

Praveen Singh – Associate V.P., Fundamental Currencies and Commodities, Sharekhan by BNP Paribas, said, "Wider markets fell, which boosted the safe-haven demand for the U.S. Dollar despite the U.S. yields edging lower. The U.S. Dollar Index closed with a gain of 0.45% at 102.54. The two-year U.S. yields were down 0.18%, while the battered ten-year bonds rallied as the yields fell 1.58% to 4.022%. China's CPI inflation data for July came in -0.3% y-o-y Vs the forecast of -0.40%. Investors look forward to the U.K.'s Q2 GDP data being released today. That the yellow metal fell in a risk-off environment reflects weakness in the metal."

Prices are retraced from the high of $1950 after the non-farm payroll data print. Fed officials are again sounding hawkish and have stated increasing interest this year to control inflation.

Deveya Gaglani, Research Analyst - Commodities, Axis Securities, said, "The dollar index is heading towards the strong resistance zone of $103.5 level. Breakout above the mentioned level may push prices higher toward the $104 level, which will be bearish for costs, or it will continue to trade in the mentioned range. Investors will be eyeing CPI data this week, which may give cues from the Fed regarding the rate hike. Strong support in gold is seen around the $1920 level, and resistance is placed around the $1960 level. In the domestic market, support is placed around the 59200 level, and resistance is around the 59600 level."

Further, one must note that gold traded steadily, hovering around its one-month lows as bond yields and the dollar held firm ahead of U.S. consumer price data that could build the case for or against further interest rate hikes.

Manav Modi, Analyst, Commodity and Currency, MOFSL, said, "Dollar index continues to trade above the 102 mark, while even though slight dip was witnessed in U.S. yields after Moody's cut its credit ratings on several small- to mid-sized U.S. banks, it continues to hover above 4% mark. U.S. and European bank stocks dropped on renewed investor worries about the industry's health after rating agency Moody's downgraded several U.S. lenders, and Italy approved a surprise 40% windfall tax on its lenders. Since the start of this week, Fed officials have been sharing mixed comments, keeping market participants on edge, regarding interest rate decisions in the next meet. Philadelphia Fed President Patrick Harker said the U.S. central bank may be at the stage where it can leave interest rates where they are, barring any abrupt change in the direction of recent economic data. Focus this week is set on U.S. inflation data and RBI policy meeting."

Adding to this, Amit Khare, Associate Vice President at GCL Broking, "Bullions daily charts are trading at demand zone, Good upside movement is possible in near future,  Momentum Indicator RSI also indicating the same, So traders are advised to make fresh buy positions in Gold and Silver near given support level one with the stop loss of support level two and book near given resistance levels: Gold October Support 59200/58900 and Resistance 59700/59900. Silver September Support 70000/69400 and Resistance 71000/71500."