1 week ago
Gold and Silver Prices Diverge as US Inflation Data Looms
Gold prices went up on Monday but slipped a little on Tuesday.
Silver prices fell on both days.
On Tuesday, a stronger US dollar and higher bond yields made gold less attractive.
Investors are waiting for US inflation numbers on Wednesday.
They are also watching Kevin Warsh speak at the Jackson Hole Symposium on Friday.
These events may provide clues about future US interest rates.
Tensions involving new US sanctions on Iran are also affecting markets.
Analysts still expect gold and silver may find support if prices fall to certain levels.
MCX gold rose 0.42% to ₹1,63,120 on Monday, then fell 0.14% to ₹1,62,999 on Tuesday morning.
MCX silver declined on both days, falling 0.58% Monday and 0.55% Tuesday to ₹2,42,880 per kilogram.
A stronger dollar and rising US bond yields pressured precious metals on Tuesday, while Monday’s softer dollar and yields supported gold.
Investors are awaiting Wednesday’s US PCE inflation data and Kevin Warsh’s Friday speech at the Jackson Hole Symposium.
Analysts continued to favor buying gold and silver on dips, though they cited different support and resistance levels for the contracts.
- Who
- Gold and silver traders, investors, market analysts, the US Federal Reserve and Kevin Warsh.
- What
- Gold and silver prices moved lower on Tuesday after gold had risen and silver had fallen on Monday.
- Where
- Prices were reported on the Multi Commodity Exchange of India; the speech will take place at the Jackson Hole Symposium in Wyoming.
- When
- Monday and Tuesday morning; US PCE inflation data is due Wednesday, 26 August, and Kevin Warsh is scheduled to speak Friday.
- Why
- Tuesday’s declines were linked to a stronger dollar and higher US bond yields, while gold had gained Monday from softer oil prices, lower yields and a relatively stable dollar.
Short-Term Market Pressure
Bullish Analyst Outlook
Near-term price direction
Short-Term Market Pressure
Gold and silver faced pressure on Tuesday as the US dollar strengthened and long-term bond yields rose; silver also fell after profit booking on Monday.
Bullish Analyst Outlook
Analysts said gold’s broader bullish structure remained intact and recommended buying on dips in gold and silver.
Factors affecting gold
Short-Term Market Pressure
Higher yields and concerns about inflation and rising US debt contributed to a selloff in long-dated US bonds, reducing gold’s appeal on Tuesday.
Bullish Analyst Outlook
Analysts said geopolitical tensions involving Iran, fiscal concerns, and gold’s move to a three-month high could continue supporting demand for the metal.
Key facts
- Tuesday gold price
- MCX October gold fell 0.14% to ₹1,62,999 per 10 grams around 9:35 AM.
- Tuesday silver price
- MCX September silver fell 0.55% to ₹2,42,880 per kilogram around 9:35 AM.
- Monday comparison
- MCX gold rose 0.42% to ₹1,63,120, while silver fell 0.58% to ₹2,45,171 around 9:35 AM.
- Key US data
- The July Personal Consumption Expenditures price index, the Federal Reserve’s preferred inflation gauge, is due Wednesday, 26 August.
- Gold technical levels
- Tuesday analyst levels included support at ₹1,62,200 and ₹1,61,000 and resistance at ₹1,64,000 and ₹1,65,150; another analyst identified ₹1,67,000 as a longer-term resistance target.
- Silver technical levels
- Tuesday analyst levels included support at ₹2,41,400 and ₹2,39,100 and resistance at ₹2,47,000 and ₹2,50,000.
- Market drivers
- The dollar index rose for three consecutive sessions by Tuesday, while US long-term bond yields climbed; oil prices fell Monday but rose nearly 1% Tuesday to about $93 per barrel.
Quotes
Manoj Kumar Jain
Commodity research analyst at Prithvifinmart Commodity Research
“As long as prices remain above this level, the bullish momentum is expected to remain intact, and the buy-on-dips strategy continues to be preferred. The strong technical setup is supported by international gold, which has climbed to a three-month high, gaining more than 7% over the past four sessions and moving firmly above the $4,600 level.”
livemint.com
“The strength in MCX is closely supported by international gold, where bullion has also remained firm amid a sharp decline in the U.S. dollar and continued weakness in longer-duration Treasury bonds. The 30-year Treasury yield had earlier touched a 19-year high of 5.337%, but Treasury buybacks triggered a temporary decline in yields.”
livemint.com
Sources
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