Gold and silver prices witnessed some volatility in early trade on the MCX on Monday, 6 July, torn between easing concerns over US Fed rate hikes after softer-than-expected jobs data, and an elevated dollar.
After trading in the red for the initial few minutes, MCX gold August futures were 0.03% up at ₹1,47,418 per 10 grams, while MCX silver September futures were 0.02% up at ₹2,37,447 per kg around 9:10 am.
However, they quickly erased gains and around 9:25 am, the MCX gold August contract was 0.12% down at ₹1,47,201 per 10 grams, and the MCX silver September futures were 0.46% down at ₹2,36,317 per kg.
The dollar index climbed by 0.10% to 100.98, while crude oil benchmark Brent crude eased by half a per cent to trade below $72 per barrel.
On the other hand, US gold prices were near a two-week high, as softer-than-expected U.S. jobs data last week dimmed expectations of aggressive Federal Reserve interest rate hikes this year.
Rising about 2% last week, international bullion prices snapped their four-week losing streak, after softer-than-expected U.S. payrolls data, which eased concerns over the potential rate hikes by the US Fed.
ADP’s national employment report showed that private employment in the US rose by 98,000 jobs in June, below expectations of a 1,18,000 rise.
Nonfarm payrolls increased by just 57,000 in June, below the expectations of a 1,10,000 rise. Moreover, April and May payrolls were also revised down by 74,000.
According to Reuters, the CME FedWatch tool indicates traders now see a 55% chance of a US Fed rate hike in September, down from more than 60% before the payroll data.
The focus is now on the minutes of the Fed’s June 16-17 meeting, due on Wednesday, for further clues on the central bank’s monetary policy.
The next policy meeting of the US Federal Reserve is scheduled for 28-29 July.
Gold and silver: What should investors do?
Experts say one can buy the dips in gold and silver at the current juncture, keeping the key support and resistance levels of the precious metals.
“We suggest buying gold on dips around ₹1,46,000 and ₹1,45,000 range with a stop loss below ₹1,43,850 for the targets of ₹1,48,000 and ₹1,49,100, and buying silver on dips around ₹2,34,400 and ₹2,31,000 range with a stop loss below ₹2,27,000 for the targets of ₹2,41,000 and ₹2,44,000,” said Manoj Kumar Jain of Prithvifinmart Commodity Research.
As per Jain, gold has support at $4,145 and $4,110 while resistance is at $4,220 and $4,255 per troy ounce, and silver has support at $60.20 and $59.10, while resistance is at $64 and $65.50 per troy ounce in today’s session.
MCX gold has support at ₹1,46,650 and ₹1,45,800, and resistance is at ₹1,48,050 and ₹1,49,100, while silver has support at ₹2,34,400 and ₹2,31,000 and resistance is at ₹2,41,000 and ₹2,44,400, said Jain.
Ravi Singh, Chief Research Officer at Master Capital Services, said the overall structure has turned constructive, and any short-term decline towards the ₹1,45,000 support area should be viewed as a buy-on-dips opportunity.
“A sustained move above ₹1,50,000 could further strengthen the positive outlook,” said Singh.
Jigar Trivedi, Senior Research Analyst at IndusInd Securities, said MCX gold August futures may rebound to ₹1,47,800 per 10 grams as the undertone is bullish in the global markets.
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Disclaimer: This article is for educational purposes only and does not constitute investment advice. The views and recommendations expressed are those of individual analysts or broking firms, not Mint. We advise investors to consult with certified experts before making any investment decisions, as market conditions can change rapidly and circumstances may vary.
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