Gold slumps to 7-week low on MCX, no respite for silver too
Gold slumps to 7-week low on MCX, no respite for silver too
Gold prices on the MCX remained steady at Rs 70,992 per 10 grams on Thursday, with an intraday low of Rs 70,870. In the international market, prices also showed stability, hovering around $2,302.70 per ounce.
In the silver market, the price on the MCX hovered at Rs 86,564 per kg and hit an intraday low of Rs 86,451. In the international market, the price hovered around $28.73 per ounce.
Anuj Gupta, Chief of Commodity and Currency at HDFC Securities, said, “MCX silver is trading at a six-week low of Rs 86,551. Gold is trading at a seven-week low of Rs 70,979. The strength of the dollar index and the hawkish statements given by Fed members are putting pressure on bullion, with expectations of further weakness due to less physical demand and reduced buying by China. Now gold is trading below $2,300 per ounce, and silver is trading below $29 per ounce."
Moreover, Comex Gold was down almost 1% in the last session as the dollar index touched a 2-month high, and an uptick in bond yields dented its appeal.
Deveya Gaglani, Senior Research Analyst at Axis Securities, noted, "In the spot market, prices are hovering below the crucial support zone of the $2,300 level, which is a negative sign for prices. Traders will await the final GDP data in the evening and the core PCE price index data, due tomorrow, to take cues regarding the Fed rate hike. Strong support in MCX is placed around the Rs 70,700 level. A breakdown below this level may push prices lower towards Rs 70,000/69,500 in the coming weeks."
Additionally, Kaynat Chainwala, AVP-Commodity Research at Kotak Securities, stated, "COMEX Gold prices plunged for the second day and closed near a three-week low, weighed down by stronger yields and a higher dollar. US 10-year yields rose 8 bps on Wednesday, increasing the opportunity cost for holding the yellow metal."
Fed Governor Michelle Bowman said that inflation will remain elevated for some time, so it’s not yet appropriate to start cutting rates. The likelihood of a 25bps Fed rate cut by September is currently at 64%, down from 68% earlier in the week. Traders are still betting on two quarter-point reductions this year.
"Investors now look ahead to weekly jobless claims, durable goods orders, and pending home sales data later today," added Chainwala.
Watch Live TV in English
Watch Live TV in Hindi