Gold prices retreated in early trade on Wednesday as investors booked profits following recent gains. On the Multi Commodity Exchange (MCX), gold June futures slipped by ₹452, or 0.48%, to ₹93,195 per 10 grams, despite an earlier uptick driven by easing inflation concerns.
Silver July futures also declined, falling by ₹704, or 0.73%, to ₹96,063 per kilogram.
Recent Market Performance
On Tuesday, both gold and silver had closed higher. MCX gold June futures ended the session at ₹93,647 per 10 grams, up 0.80%, while silver July futures rose 1.49% to ₹96,767 per kilogram.
In global markets, precious metals recovered from previous losses after data showed US consumer inflation cooling. The US Consumer Price Index (CPI) rose 3.2% year-on-year in April, slightly above the expected 3.1%, but below March’s 3.3%. The Core CPI remained steady at 2.8%, matching forecasts.
Factors Influencing Prices
The moderation in US inflation led to a decline in the US Dollar Index (DXY), which slipped to 100.96, down 0.05% for the day. This supported gold and silver prices globally.
“Cooling US inflation pushed the dollar lower, helping gold and silver recover. Additionally, comments from the Indian Prime Minister about halting Operation Sindoor temporarily also influenced market sentiment,” said Manoj Kumar Jain of Prithvifinmart Commodity Research.
Silver continues to receive support from ongoing US-China trade negotiations, given its industrial demand. However, potential Russia-Ukraine peace talks and rising US 10-year bond yields could cap gold’s gains.
Market Outlook and Strategy
Jain expects volatility in gold and silver prices to persist, influenced by fluctuations in the dollar index and geopolitical developments. He predicts gold will hold support near $3,140 per troy ounce, with silver stabilizing around $31.40.
For domestic markets, Jain highlights the following levels:
Gold support: ₹93,150–92,660
Resistance: ₹94,000–94,450
Silver support: ₹96,000–95,350
Resistance: ₹97,400–98,200
His trading advice: avoid gold purchases and consider buying silver near ₹95,800, with a stop loss at ₹95,100 and a target of ₹97,200.
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