Gold, silver prices today: Bullion dips by ₹160 on weak global trends

Saumil Gandhi, Senior Analyst – Commodities, HDFC Securities said, “Spot gold prices in the Delhi markets traded at ₹60,080 per 10 grams, down ₹160 per 10 grams.”

Gandhi added, “Gold price has come under pressure this week after the US Fed officials advocated more action to curb inflation, diminishing expectations that the central bank’s tightening campaign has ended.”

On Friday, spot gold ended at $1940.34 per ounce, down by 0.85%. Apart from better-than-expected GDP data in the US, the upside in treasury yields also damped the mood in bullion.

However, at MCX, gold futures maturing June 5, traded at ₹59,566 per 10 grams, up by ₹106 or 0.18%. Gold futures for August 4 maturity, performed at ₹59,780 apiece up by ₹126 or 0.21%. Silver futures, maturing on July 5, traded at ₹70,993 higher by ₹751 or 1.07%.

Praveen Singh – Associate VP, Fundamental Currencies and Commodities, Sharekhan by BNP Paribas said, “The second estimate pegged Q1 GDP annualized growth at 1.3% Vs the forecast of 1.10%. Weekly jobless claims at 229k were lower than the forecast of 245k. Personal consumption at 3.80%, core PCE at 5%, and GDP price index at 4.20% were better than the forecasts of 3.70%, 4.90%, and 4% respectively. Pending home sales stagnated in April, thus missed the forecast of 1% rise; however, US GDP data eclipsed home sales data, which led to a surge in yields, thus boosting the US Dollar.” As the German economy slipped into a winter recession, it is another positive factor for the Greenback.

Generally, a surge in the dollar tends to push gold prices lower.

Further, Singh added, “The ten-year US yields at 3.823% were up 2.12% yesterday, while the US Dollar Index rose 0.33% to 104.24. The ten-year yields look set to rise to 4%.”

He also pointed out that the latest US data docket includes PCE core deflator (April) which is Fed chair Powell’s preferred gauge of inflation. In addition to the crucial inflation data, market participants will look forward to durable goods orders (April), personal income (April), personal spending (April), U. Of Michigan consumer sentiment, and U. Of Michigan consumer inflation expectations for both short term and long term. It is going to be a busy day on data front.

In regards to the US debt ceiling, Singh said that the issue is yet to be resolved, though reportedly the concerned parties have been able to narrow down their differences, which weighed further on the yellow metal. The rating agency Fitch has kept US on negative watch, though it expects debt ceiling agreement to be reached by June 1, the X date.

Moreover, as per Singh, risk appetite remains strong on rallying IT stocks, which again is a bearish factor for the yellow metal.

Going ahead, Singh said, “Gold is currently trading with a gain of 0.35% at $1947.74. Considering the current levels of US yields, dissipating banking concerns, no Fed pivot in sight, and Dollar Index value, the metal is somewhat overvalued at current level.” Key support is around $1930 followed by the psychologically important round figure of $1900, while resistance is at $1952/$1965/$1988.

Indian gold prices will also observe the upcoming GDP data of the country. 

Updated: 26 May 2023, 05:37 PM IST