Gold Prices Decline by Rs 450 per 10 Grams Today
Gold prices experienced a notable decline today, with June futures at the Multi Commodity Exchange (MCX) dropping to ₹93,195 per 10 grams, reflecting a decrease of ₹452 or 0.48%. This downturn follows a period of profit booking, despite an initial rise in precious metals spurred by easing inflation rates. Meanwhile, silver July futures also fell, trading at ₹96,063 per kilogram, down ₹704 or 0.73%. The fluctuations in both gold and silver prices are influenced by recent economic indicators and geopolitical developments.
Market Performance of Gold and Silver
On Tuesday, the domestic and international markets saw a positive closing for both gold and silver. Gold June futures ended at ₹93,647 per 10 grams, marking an increase of 0.80%, while Silver July futures closed at ₹96,767 per kilogram, up by 1.49%. The recovery in international markets followed a report indicating a cooling of U.S. inflation for April, with the Consumer Price Index (CPI) registering an annual rate of 3.2%, slightly above expectations but lower than March’s figure of 3.3%. The Core CPI remained steady at 2.8%, aligning with market forecasts.
The decline in the U.S. dollar index, prompted by the easing inflation, has provided support for gold and silver prices. Manoj Kumar Jain from Prithvifinmart Commodity Research noted that the Indian Prime Minister’s recent comments regarding the operation Sindoor have also contributed to the recovery in precious metals. However, ongoing geopolitical tensions, particularly concerning potential peace talks between Russia and Ukraine, may pose challenges to gold’s upward momentum.
Influence of Economic Indicators
The recent fluctuations in gold and silver prices can be attributed to various economic indicators. The U.S. 10-year bond yields have increased, which could limit the gains of gold. Analysts suggest that both gold and silver prices are likely to remain volatile in the coming week, influenced by the dollar index’s movements and geopolitical developments. Gold is expected to maintain a key support level of $3,140 per troy ounce, while silver is projected to hold at $31.40 per troy ounce.
The U.S. Dollar Index (DXY) is currently positioned near 100.96, reflecting a slight decline of 0.05%. This decrease in the dollar’s strength has historically correlated with rising gold and silver prices, as weaker dollar values make these metals more attractive to investors.
Trading Strategies and Recommendations
In light of the current market conditions, Manoj Kumar Jain has outlined specific trading strategies for gold and silver on the MCX. For gold, support levels are identified at ₹93,150 to ₹92,660, with resistance anticipated between ₹94,000 and ₹94,450. For silver, support levels are set at ₹96,000 to ₹95,350, while resistance is expected between ₹97,400 and ₹98,200.
Jain advises against purchasing gold at this time but suggests considering silver investments near ₹95,800, with a stop loss set at ₹95,100 and a target of ₹97,200. These recommendations reflect the current market dynamics and the potential for price fluctuations in the near future. Investors are encouraged to stay informed about ongoing economic developments and adjust their strategies accordingly.
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