gold price India Global cues were followed by a steep fall on Monday. On the Multi Commodity Exchange (MCX), the futures of gold fell 0.76 percent to Rs 51,306 per 10 grams at 1620 hrs on June 13. There was also a sharp fall in the price of silver. The futures of the precious metal fell nearly 1.50 per cent to Rs 61,015 for one kg on Monday.
In the international market, the yellow metal declined in the session after touching a month-ago high. Spot gold was down 0.6 per cent at $1,859.90 an ounce as of 0732 GMT. US gold futures also closed down 0.6 per cent at $1,864.40.
What caused this huge drop in the price of gold on Monday?
Inflation in the United States rose to 8.6 percent in May, the highest in 40 years, according to data released by the US Department of Labor. Analysts now expect the US Federal Reserve to aggressively hike interest rates in the coming months to contain inflation. ICICI Direct said in a note.
Higher inflation numbers also lifted the benchmark US 10-year Treasury yield and dollar index. The 10-year yield hit its highest on Monday. Similarly, the US dollar index also jumped. Both these factors limited the further upside in the precious metal prices.
Gold Price Future Outlook: What to Expect
“MCX Gold prices are expected to trade with a positive bias due to concerns over increased inflation and geopolitical uncertainty. It is trading above the resistance level of 50 DMA (Rs 51,315). As long as it remains above this level, it is expected to retest the Rs 52,000 level for the day. Silver prices are expected to give a signal from gold prices and may move towards Rs 63,500 levels for the day,” ICICI Direct noted.
“International spot and COMEX gold prices began Monday morning in Asian trade tracking dollar strength and consolidating bond yields, further higher backed by an aggressive Federal Reserve approach to combat inflation. Continues to rise. However, downside may be limited amid rising economic concerns. COMEX August gold today’s range is $1841.47-1894.57,” said Sriram Iyer, Senior Research Analyst, Reliance Securities.
“Given a weak opening in overseas markets, domestic gold futures prices may start off weak on Monday morning. A weak rupee can cap the downside. Today’s MCX Gold August range is Rs 50,815-52,190.
Silver Price Outlook
“International spot and COMEX silver prices started weakening on Monday morning in Asian trade on a weaker dollar and bond yields. Today’s range of COMEX July Silver is $21.437-$22.222. In view of a weak opening in the overseas markets, domestic silver futures may have a weak start in the early hours of Monday. Today’s July range of silver on MCX is Rs 60,760-62,590.
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