Gold prices fall by Rs 2,500 in a month. What's ahead?

With high volatility, Gold June futures contracts at MCX opened higher by 0.64% or Rs 603 at Rs 95,444/10 grams, falling by Rs 1,900 in the last one month, from its all-time high levels.

Displaying high volatility, gold prices remained range-bound as market attention shifted from Moody's US downgrade back to the Federal Reserve’s interest rate trajectory and the broader US economic outlook.

Meanwhile, silver July futures contracts also opened slightly higher by Rs 332 or 0.34% at Rs 97,620/kg.

On Tuesday, gold and silver settled on a positive note in the domestic and international markets. Gold June futures contract settled at Rs 94,841 per 10 grams with a gain of 1.65% and silver July futures contract settled at Rs 97,288 per kilogram with a gain of 1.92%.

Gold and silver extended their gains in a highly volatile session on Tuesday amid more safe-haven buying due to U.S. rating downgrades by Moody’s amid higher Federal debts.

The dollar index extended its fall, and the global equity markets also plunged after U.S. rating downgrades and supporting gold and silver prices. The US Dollar Index, DXY, was hovering near the 99.69 mark, falling 0.43 or 0.43% today.

Gold and silver also gained after the Chinese central bank cut its 1-year and 5-year loan rates by 10 basis points, and the Australian central bank also cut interest rates by 25 basis points on Tuesday. Canadian inflation unexpectedly surged in April, and European consumer confidence again disappointed and supported precious metal prices.

However, Manoj Kumar Jain of Prithvifinmart Commodity Research believes that the Russia-Ukraine ceasefire deal hopes could limit gains of precious metals.

"We expect gold and silver prices to remain volatile this week amid volatility in the dollar index and Russia-Ukraine peace deal hopes; gold prices could hold their support level of $3,120 per troy ounce and silver prices could also hold $31.40 per troy ounce levels,” he added.

Gold price prediction


From a trader’s perspective, Manoj Kumar Jain suggested the following ranges for gold and silver on MCX:

• Gold has support at Rs 94,200-93,650 and resistance at Rs 95,360-95,800
  
• Silver has support at Rs 96,650-96,000 and resistance at Rs 98,000-98,850
  

Jain suggests buying silver around Rs 96,800 with a stop loss of Rs 96,150 for a target of Rs 98,250.

Meanwhile, Aksha Kamboj, Executive Chairperson of Aspect Global Ventures stated that continued buying from global central banks and steady demand during India’s wedding season are expected to keep downside capped, even though major catalysts for a sharp upmove are currently absent.

As a result, he believes that gold prices are likely to consolidate with bouts of volatility until a clear directional trigger emerges.

Gold rates in physical markets


Gold Price today in Delhi


Standard gold (22 carat) prices in Delhi stand at Rs 57,480/8 grams while pure gold (24 carat) prices stand at Rs 61,328/8 grams.

Gold Price today in Mumbai


Standard gold (22 carat) prices in Mumbai stand at Rs 56,640/8 grams while pure gold (24 carat) prices stand at Rs 60,392/8 grams.

Gold Price today in Chennai


Standard gold (22 carat) prices in Chennai stand at Rs 56,688/8 grams while pure gold (24 carat) prices stand at Rs 60,400/8 grams.

Gold Price today in Hyderabad


Standard gold (22 carat) prices in Hyderabad stand at Rs 57,040/8 grams while pure gold (24 carat) prices stand at Rs 60,840/8 grams.

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