Gold Price Today: Yellow metal opens at Rs 71,489/10 gms, silver drops Rs 2,000/kg

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After hawkish comments from the US Fed chief Jerome Powell, gold prices on MCX for August futures contracts were down Rs 481 or 0.67% to trade at Rs 71,489 per 10 grams, while MCX July silver contracts dropped by nearly Rs 2,000 or 2.18% to Rs 88,469 per kg.

Gold prices fell after three days of gains as investors reacted to the Federal Reserve’s latest signals indicating only one interest-rate cut this year, instead of the three previously forecast.

Bullion gained on Wednesday after US inflation eased in May. The US CPI inflation came in at 3.3% year-over-year (YoY), slightly below the expected 3.4%. Core CPI inflation for May was 0.2%, also below the expected 0.3%.

However, the one-time interest cut indications led to a rise in Treasury yields and the dollar, which negatively impacted gold since it doesn’t pay interest and is priced in dollars. The prospect of higher rates also reduced gold’s appeal.

On Wednesday, gold and silver settled on a positive note in the domestic markets. Gold August futures contract at MCX settled at Rs 71,970 per 10 grams with a gain of 0.67% and silver July futures contract settled at Rs 90,445 per kg with a gain of 2.01%.Today, the US Dollar Index, DXY, was hovering near the 104.77 mark, rising 0.12 or 0.12%.“Despite the supportive environment, hawkish comments on interest rate cuts by the US Fed could potentially push gold and silver prices lower again,” says Rahul Kalantri, VP Commodities, Mehta Equities.Gold is up 12% this year due to demand from central banks and Chinese consumers, despite a 5% drop from last month’s record high.

“On the daily timeframe, MCX Gold (August) has broken down from its rising channel pattern and is trading near its breakdown level. The price is currently below the 21 EMA, which acts as resistance, indicating weakness. If the price breaks below 70,900, which is also the 50 EMA, we can expect further downside movement. Key resistance levels to watch are at 71,900 and 72,500, while support levels are at 70,900 and 70,082,” said Neha Qureshi, Senior Technical & Derivative Analyst, Anand Rathi Commodities & Currencies.

Intraday Trading Strategy by Neha Qureshi:
Sell MCX August Gold futures at Rs 71,900 with a stop loss of Rs 72,500 and a price target of Rs 71,000

Sell MCX July Silver futures at Rs 90,400 with a stop loss of Rs 91,400 and a price target of Rs 88,400

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)

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