Gold and silver prices in India opened sharply higher on the Multi Commodity Exchange (MCX) on Friday, led by strong buying, as investors hope for a US-Iran peace deal which could end the war in West Asia.
MCX gold rate for August futures contracts opened higher by ₹1,663, or 1.11%, at ₹1,50,595 per 10 grams as against its previous close of ₹1,48,932 level.
for July futures contracts opened higher by ₹3,123, or 1.30%, at ₹2,42,776 per kg, as compared to its previous close of ₹2,39,653 level.
In the international market, gold prices fell and were on track for a weekly loss, weighed down by concerns around inflation and potential US Federal Reserve interest rate hikes.
Spot gold price declined 0.5% to $4,191.17 per ounce, and was set for a weekly loss of 3.2%. US gold futures for August delivery rallied 2.4% to $4,212.70. Spot prices fell 0.4% to $67.10 per ounce.
On Thursday, gold prices fell to an over six-month low before closing higher at $4,219.69, as US President Donald Trump called off planned military strikes on Iran and signalled an imminent peace deal.
Trump said the as soon as this weekend that would reopen the Strait of Hormuz to shipping, but Iran countered that it had not reached a final decision on an agreement.
prices have dropped about 20% since the Iran war began, as fears of rising inflation due to elevated energy costs raised expectations of the US Federal Reserve bank rate hike, increasing the opportunity cost of holding the non-yielding metal.
Traders are currently pricing a 60% chance of a US rate hike in December, according to the CME Group’s FedWatch tool.
On the data front, US producer prices increased more than expected in May, leading to the largest annual gain in 3-1/2 years.
Meanwhile, holdings of the largest gold-backed exchange-traded-fund (ETF), New York’s SPDR Gold Trust, fell about 0.3% to 923.89 metric tons on Wednesday.
Gold Price Outlook
Jigar Trivedi, Senior Research Analyst at IndusInd Securities said that the outlook for MCX gold and MCX silver prices remains positive and expects a pullback move.
“ may face resistance at ₹1,52,000 level, while support is seen at ₹1,49,500 level. Traders can buy gold August futures as a pullback rally is expected,” said Trivedi.
Silver Price Outlook
According to Trivedi, support for MCX silver July futures is seen at ₹2,35,000 level, while resistance is placed at ₹2,55,000 level.
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