Gold prices opened on the Multi Commodity Exchange (MCX) on Monday at Rs 59,241 per 10 grams and hit an intraday low of Rs 59,210. In the international market, prices hovered around $1,961.33 per troy ounce. Meanwhile, silver opened at Rs 74,695 per kg and hit an intraday low of Rs 74,585 on the MCX. The price hovered around $24.85 per troy ounce in the international market.
Anuj Gupta, Vice President of IIFL Securities, said, "Last week, we saw a range-bound trend in gold and silver prices; however, at the start of the week, gold tested 59884 levels, and silver tested 76674 levels. We saw profit booking at the last trading day of the week, and gold [dipped] 0.06% at 59298 levels. Silver [fell] 1.37% at 74950 levels."
However, he sees the overall gold and silver trend as positive the following week. They will take cues from the FOMC meeting. For this week, gold has Support at 58800 ($1940), 58200 ($1920), while resistance at 59800 ($1980) and 60200($2000) levels. Silver Support is at 73500, $24 and then 72000, $23 levels, while resistance is at 76000, $25.50 and 78000 $27 levels. We recommend buying on support levels as the technical trend is positive, and fundamentally, FOMC may keep interest rates stable, which may support the bullions and pressure the dollar index. Gold is expected to test 60000 levels and silver to test 78000 levels very soon."
Gold prices traded steadily after inching lower the previous week as market participants remain cautious ahead of the key Federal Reserve meeting.
Manav Modi, Analyst, Commodity and Currency, MOFSL, said, "A recovery in the dollar from 15-month lows hit earlier this month, to now hovering around the 101 mark, ahead of the Fed meeting, weighed on the safe have assets. In the previous week, US Retail sales, IIP, were reported weaker than expectations; however, housing, housing-related data, and weekly jobless claims data weighed on bullions. The CME Fed-Watch tool shows more than 95% probability for a 25bps rate hike in July and more than 70% chance of a 25bps rate hike in the September meeting."
After comments from a few Fed officials and weak economic data last week, there are expectations that the Fed might announce a slowdown in the pace of the rate hike cycle in this meeting.
"Beyond the Fed, the ECB and the BOJ are also set to decide on monetary policy this week. Focus this week will also be on the US GDP consumer confidence data, which could trigger further volatility in the market," said Modi.
Amit Khare, Associate Vice President at Ganganagar Commodity Limited (GCL), said, "MCX Gold and Silver gave a negative closing yesterday. August Gold closed at 59309(-0.40%). September Silver closed at 74970(-0.64%), Bullion daily charts are now showing profit booking, Trading at an overbought zone, and Momentum Indicator RSI also indicating the same, So traders are advised to book profit in longs and can create fresh short positions in Gold and Silver near given residence level one with the stop loss of resistance level two and book near given support levels: Gold August Support 59000/58800 and Resistance 59600/60000. Silver September Support 74500/74000 and Resistance 75600/76200."