Gold, silver price on June 5: Yellow metal prices inch higher after sell-off in last session

Gold prices on the MCX hovered at Rs 72,077 per 10 grams on Wednesday, hitting an intraday low of Rs 71,811. In the international market, prices maintained a similar trend, hovering around $2,331.12 per ounce.

This indicates a certain level of stability in the gold market.

Meanwhile, silver hovered at Rs 89,799 per kg and hit an intraday low of Rs 89,072 on the MCX. In the international market, the price hovered around $29.68 per ounce.

Navneet Damani, Grp Sr. Vice President, Head Commodity & Currency Research, Motilal Oswal Financial Services, said, "Gold prices inched higher after sell off witnessed in previous session,  as signs of a cooling U.S. economy ramped up expectations of rate cuts and drove the dollar to two-month lows."

The Fed officials this entire month have been preparing the market for further delay in rate cuts as inflation is still away from their target of 2%. Bets for a 25bps rate cut in September rose by 5% from yesterday to 55%. This shift in expectations came after purchasing managers index data showed that U.S. manufacturing activity shrank for a second consecutive month in May.

The PMI data, which came just days after a soft gross domestic product reading, pushed up bets that the U.S. economy was cooling, which could herald softer inflation and give the Federal Reserve more confidence to begin cutting interest rates.

Damani said, "Lower than expected JOLTS and flat Factory orders data also supported metals on lower end. Amidst this lower than expected data from US, Dollar index sink to a two month low, hovering around 104. Focus today will be on US Services PMI and ADP employment change report. Broader trend on COMEX could be in the range of $2310 - 2355 and on domestic front prices could hover in the  range of Rs 71,700-72,800."

Jateen Trivedi, VP Research Analyst - Commodity and Currency, LKP Securities said, "Gold prices remained weak, trading below 72,175, after giving up yesterday's gains of 72550. The dollar index's strength added resistance, causing gold to retreat. Despite a broadly positive trend, gold may experience a minor correction this week due to a heavy data schedule, including Wednesday's non-farm employment change and Friday's non-farm payroll reports, which will provide clarity on interest rate decisions. Gold prices are expected to trade in a range of 71,250-72,750 this week."