Gold, silver prices: MCX Gold trades lower on positive US inflation numbers

Gold prices on the Multi Commodity Exchange (MCX) opened on Wednesday at Rs 59,301 per 10 grams and hit an intraday low of Rs 59,313. In the international market, prices hovered around $1,947.29 per troy ounce. Meanwhile, silver opened on Wednesday at Rs 72,330 per kg and hit an intraday low of Rs 72,289 on the MCX. The price hovered around $23.80 per troy ounce in the international market.

Anuj Gupta, Vice President of IIFL Securities, said, “Yesterday, gold prices corrected by 0.66% and closed at Rs 59,231 levels. In the international market, it is trading at $1,947 levels per ounce. We noticed a negative trend in gold prices due to positive US inflation numbers, and demand for gold faded out. Market is also waiting for clarity on the FOMC (Federal Open Market Committee of the US Federal Reserve) front on interest rates and further policy decisions. On the MCX, gold prices are trading below its two months low levels, which may show a further negative trend in the gold prices.”

He said, “[We see] technically strong support at Rs 59,000 levels and then Rs 58,700 levels, Resistance at Rs 59,500 and then Rs 59,900 levels. One can sell around Rs 59,500–59,600 levels with the stop loss of Rs 59,900 and for the target of Rs 59,000–58,900 levels. Gold may trade in the $1,940–1,960 levels range.”

Adding to this, Manav Modi, Analyst, Commodity and Currencies, MOFSL, said, “Gold trades steady after slipping in yesterday’s session, as US treasury yields rebounded, while traders firmed up bets the Federal Reserve would stand pat on interest rates after data showed US consumer price gains slowed in May. The annual pace of US inflation eased last month to its lowest level in more than two years, climbing to 4%, down from 4.9%, which was reported earlier on annual basis. However, we did not see any change in the core CPI data, which was reported at 0.4%—in line with expectations. After the inflation data, probability chart for June meet showed more than 90% chance for a pause; however, there was no change in July meeting scenario which continued to show a possibility of a 25 basis points rate hike.”

Modi added: “Soft US inflation data triggered a rally in most risk-driven markets. Risk appetite in global markets also increased as China cut interest rates for the first time in 10 months, as the government sought to shore up a slowing economic recovery. Market participants will be a bit cautious ahead of the Fed policy meet scheduled later today. Along with that, focus today will also be on the UK GDP and US PPI data.”