Gold and silver prices traded lower on the MCX on Thursday (16 July) morning, as escalating tensions between the US and Iran fuelled concerns over inflation staying at elevated levels for a longer period, prompting the US Federal Reserve to hike rates this year.
MCX gold August futures was 0.39% down at ₹1,41,301 per 10 grams, while MCX silver September futures were 0.44% down at ₹2,19,650 per kg around 9:10 am.
The dollar index hovered near 100.5, while crude oil prices witnessed mild profit booking even as the Middle East conflict intensifies.
As per media reports, Iran has no plans for negotiations with the US at present. Iranian Foreign Ministry spokesperson Esmaeil Baghaei said Iran is focused on defending the country amid ongoing US military strikes, and it will continue to respond “firmly” to US attacks.
Meanwhile, the US launched two new waves of strikes on the Iranian military. US President Donald Trump reportedly said he would expand military strikes on Iran to power plants and bridges unless Tehran returned to negotiations.
The revival of the Middle East conflict has raised the risk that inflation will remain above the targets of major central banks globally.
US inflation and PPI prints have come softer, but market participants feel higher energy prices will drive up inflation.
The US CPI inflation for June eased to 3.5% from 4.2% in May. Month-on-month, the US CPI declined 0.4%, the first decline since the COVID-19 pandemic (April 2020), after increasing 0.5% in May.
Producer Price Index (PPI) declined 0.3% month-on-month in June, posting their biggest decline since April 2025. Year-on-year, the PPI increased 5.5% after rising 6% in May.
“Gold prices are under pressure despite US producer prices falling 0.3% in June, following softer consumer inflation data earlier this week. While the weaker inflation readings reduced expectations of an immediate Federal Reserve rate hike, the relief was offset by a sharp rally in crude oil prices as the Middle East conflict intensified,” Ravi Singh, Chief Research Officer at Master Capital Services, noted.
“Rising energy prices have revived concerns that inflation could remain elevated, reinforcing expectations that the Fed may keep interest rates higher for longer. Fed Chair Kevin Warsh reiterated the central bank’s commitment to its 2% inflation target, while several policymakers maintained a cautious stance, keeping pressure on bullion,” Singh added.
Gold and silver prices: Key levels to watch
As per Singh, immediate support for MCX gold is placed near the ₹1,40,300 to ₹1,40,000 zone, and any decisive breach below these levels could accelerate the decline towards ₹1,36,000.
On the upside, ₹1,45,500 remains a strong resistance area, and the preferred strategy continues to be sell on rise as long as prices trade below this level, Singh said.
Manoj Kumar Jain of Prithvifinmart Commodity Research said gold has support at $4,022 and $3,989, while resistance is at $4,084 and $4,110 per troy ounce, and silver has support at $56 and $54.40, while resistance is at $58.80 and $60 per troy ounce in today’s session.
MCX gold, as per Jain, has support at ₹1,41,000 and ₹1,40,250, and resistance at ₹1,42,650 and ₹1,43,300, while silver has support at ₹2,17,700 and ₹2,14,000 and resistance at ₹2,24,000 and ₹2,26,600.
“We suggest buying silver in the ₹2,20,000 to ₹2,17,000 range with a stop loss below ₹2,14,000 for the targets of ₹2,24,000 and ₹2,26,000,” said Jain.
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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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