Gold prices traded lower in the domestic futures market in the morning trade on May 22 amid gains in the domestic equity market even though global cues were largely positive for the yellow metal.
Gold prices increased in international markets as the US debt ceiling talks are yet to bear fruit, while less-hawkish comments from Federal Reserve Chair Jerome Powell supported gold prices.
Further, the dollar’s fall against its peers also supported gold prices as a lower dollar makes gold more affordable for overseas buyers.
Media reports suggested US President Joe Biden and House Republican Speaker Kevin McCarthy will meet on Monday (May 22) to resolve the debt ceiling impasse after negotiations broke off on Friday (May 19).
Meanwhile, Fed Chair Powell hinted that interest rates may not need to rise further as there is still uncertainty about the impact of the previous hikes with inflation looking hard to control.
A pause in rate hikes is positive news for gold as Bullion becomes less attractive in a high-interest-rate environment.
MCX Gold June Futures traded 0.11 per cent lower at ₹60,313 per 10 grams around 10:15 am IST. MCX Silver July Futures was 0.50 per cent down at ₹72,955 per kg at that time.
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Analysts expect some volatility in gold prices with US debt ceiling talks and macroeconomic indicators in focus.
Brokerage firm Motilal Oswal Financial Services said MCX Gold may trade rangebound for the session. They may follow this trend this week as well several fed officials are scheduled to speak, along with the focus will be on US GDP, PMI data, FOMC meeting minutes and updates regarding debt ceiling talks.
As per the brokerage firm, support for gold is placed at ₹60,000- ₹59,800 whereas resistance is at ₹60,490- ₹60,740 levels.
Rahul Kalantri, VP of Commodities of Mehta Equities expects gold and silver may remain volatile in Monday’s session.
“Gold has support at $1,968-1,955 while resistance at $1,992-2,005. Silver has support at $23.55-23.42, while resistance is at $24.05-24.22. In the Indian rupee terms, gold has support at ₹60,110-59,880, while resistance is at ₹60,610, 60,790. Silver has support at ₹72,620-71,950, while resistance is at ₹73,850–74,320,” said Kalantri.
Manoj Kumar Jain of Prithvifinmart Commodity Research expects gold and silver prices to remain volatile this week amid US debt negotiations talks and volatility in the dollar index and could hold its support levels.
“Gold has support at $1,964-1,950, while resistance at $1,992-2,004 per troy ounce. Silver has support at $23.70-23.35, while resistance is at $24.40-24.84 per troy ounce,” said Jain.
At MCX, gold is having support at ₹60,000-59,770 and resistance at ₹60,600-60,880 while silver is having support at ₹72,750-72,100 and resistance at ₹73,850-74,500. We suggest buying silver on dips around ₹73,000 with a stop loss of ₹72,450 for the target of ₹74,100,” said Jain.