Gold prices have edged lower from their record highs amid global economic uncertainties, fluctuating investor sentiment, and central bank policy decisions. June futures on the Multi Commodity Exchange (MCX) opened at ₹95,444 per 10 grams on Wednesday, up 0.64% or ₹603, despite a notable drop of ₹1,900 from the peak seen over the past month.
Silver futures for July delivery also saw modest gains, starting the day at ₹97,620 per kilogram, a rise of ₹332 or 0.34%.
Investor Sentiment in Flux: US Credit Downgrade, Fed Cues in Focus
The recent volatility in gold and silver prices has been attributed to shifting investor attention—from Moody’s downgrade of the U.S. credit rating to uncertainty surrounding the Federal Reserve’s future interest rate decisions. Concerns over the fiscal health of the U.S. economy, particularly growing federal debt, have fueled safe-haven demand for precious metals.
On Tuesday, both metals ended in positive territory in domestic and international markets. MCX Gold June futures closed at ₹94,841 per 10 grams, up 1.65%, while Silver July futures settled at ₹97,288 per kg, gaining 1.92%. The safe-haven rally was supported by the U.S. Dollar Index (DXY) slipping to 99.69, a daily loss of 0.43%, and a concurrent slide in global equity markets.
Rate Cuts and Economic Indicators Add Momentum
Precious metal prices also benefited from rate cuts by key central banks. The People’s Bank of China trimmed its one-year and five-year loan prime rates by 10 basis points, while the Reserve Bank of Australia implemented a 25-basis-point cut. Meanwhile, an unexpected rise in Canadian inflation and disappointing consumer confidence data from Europe further boosted gold and silver’s appeal.
Russia-Ukraine Talks Could Cap Further Upside
However, geopolitical developments could temper the rally. Manoj Kumar Jain, head of Prithvifinmart Commodity Research, cautioned that renewed hopes for a ceasefire between Russia and Ukraine might limit additional gains in precious metals.
“We expect gold and silver prices to remain volatile this week amid fluctuations in the dollar index and ongoing Russia-Ukraine peace deal discussions,” said Jain. He added that gold is likely to hold support around $3,120 per troy ounce, with silver holding near $31.40 per ounce.
Key Technical Levels: Watch for Breakouts and Pullbacks
According to Jain, traders should monitor the following technical ranges for MCX contracts:
Gold: Support at ₹94,200–₹93,650; resistance at ₹95,360–₹95,800
Silver: Support at ₹96,650–₹96,000; resistance at ₹98,000–₹98,850
He recommends buying silver near ₹96,800 with a stop loss at ₹96,150, targeting a potential upside of ₹98,250.
Outlook: Range-Bound Trade Likely to Continue
Aksha Kamboj, Executive Chairperson of Aspect Global Ventures, noted that steady demand—particularly from India’s wedding season—and continued central bank gold purchases are providing a strong price floor for gold.
“While major catalysts for a breakout are lacking at the moment, the underlying demand remains robust. We expect gold to remain range-bound with intermittent volatility until a clear directional trigger emerges,” said Kamboj.
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