Gold and silver prices: The rates of gold and silver dropped on the MCX in the morning session on Monday, 7 September, amid tepid spot demand and weak global cues after strong US jobs data fuelled expectations of interest rate hikes by the US Federal Reserve.
MCX gold October series were 0.30% down at ₹1,52,315 per 10 grams, while MCE silver December contracts were 0.33% down at ₹2,36,885 per kg around 9:15 AM.
US gold futures for the December series declined 0.75% to $4,436.49 per troy ounce amid a mild uptick in the dollar index.
Gold and silver prices declined after data on Friday showed U.S. job growth jumped, while the unemployment rate held steady at 4.1% in August, reflecting an improvement in the labour market and fanning speculations for a potential US Fed rate hike next week.
“August payrolls increased by 1,62,000, following an upward revision to July’s gain of 21,000. This report will likely bring a few more FOMC voting members onto the hawkish side of the debate. Given the solid August payroll report, pressure is mounting on the Federal Open Market Committee (FOMC) to raise rates on September 16. Ironically, markets may become more volatile if policymakers choose not to act,” said Jeffrey Roach, Chief Economist for LPL Financial.
“The weakness in MCX gold is aligned with international gold, which has struggled near $4,400 after stronger-than-expected US payrolls sharply increased expectations of a September Fed rate hike. August payrolls rose by 162,000 versus expectations of around 55,000, pushing hike odds to roughly 60%,” Ravi Singh, Chief Research Officer at Master Capital Services, noted.
“Rising Treasury yields and renewed dollar strength are adding further pressure, while escalating US-Iran tensions and higher oil prices are keeping inflation risks elevated. With US PPI and CPI due this week, the inflation data will be crucial for determining whether rate-hike expectations strengthen further and whether gold faces another leg lower,” Singh said.
The remains unresolved. The US military on Sunday (local time) denied Tehran’s claim that it targeted an unmanned US ship in the Strait of Hormuz, calling it a ‘total lie.’ Israeli Prime Minister Benjamin Netanyahu said that the Iranian government’s downfall is approaching while it struggles for survival.
Gold and silver prices: Key levels to watch
According to Singh, MCX gold prices are falling back below the 21-day EMA and approaching the 55-day EMA.
“The rejection from the ₹1,57,000 resistance zone keeps the near-term structure sideways to bearish, while ₹1,49,600 remains the key support. A decisive break below this level could accelerate the decline towards ₹1,48,000, whereas sustained strength above ₹1,57,000 would be required to revive the bullish setup. Until then, the bias remains sell on rise,” said Singh.
Manoj Kumar Jain Prithvifinmart Commodity Research finds support for MCX gold at ₹1,51,500 and ₹1,50,150 and resistance at ₹1,53,650 and ₹1,54,400, while silver has support at ₹2,35,000 and ₹2,33,300 and resistance at ₹2,40,000 and ₹2,42,400.
“We suggest long-term investors must accumulate gold and silver in this market fall in a staggered way while traders can buy gold around ₹1,52,000 and ₹1,50,000, with a stop loss below ₹1,47,700 for the target of ₹1,54,400 and ₹1,56,500 and buying silver around ₹2,35,000 and ₹2,32,000 with a stop loss below ₹2,28,800 for the target of ₹2,40,000 and ₹2,44,000,” said Jain.
According to Jigar Trivedi, Senior Research Analyst at IndusInd Securities, MCX gold October futures are likely to decline in tandem with the global trends, with ₹1,53,000 as resistance and ₹1,52,200 as support.
Read all market-related news
Read more stories by
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.