10 hrs ago
Gold, Silver Slide Over 1% as Yields and Oil Rise
Gold and silver prices fell by more than 1% in India’s futures market.
This happened as prices also weakened in international markets.
Oil became more expensive after fighting between the United States and Iran became worse.
Higher oil prices can increase inflation, meaning everyday goods may become more expensive.
Investors then expect central banks, including the Federal Reserve, to keep interest rates higher or raise them.
Gold does not pay interest, so it can look less attractive when rates are high.
A stronger US dollar and higher government bond yields also pressured gold.
Analysts said prices could remain weak unless gold moves back above important resistance levels.
MCX gold October futures fell 1.03% to ₹1,50,164 per 10 grams around 9:05 AM on Wednesday, 2 September.
MCX silver December futures declined 1.26% to ₹2,32,464 per kilogram.
Higher oil prices, rising global bond yields, a stronger US dollar and increased rate-hike expectations pressured bullion prices.
Brent crude rose above 1% toward $96 per barrel as the United States and Iran exchanged strikes.
Analysts identified several key levels, with gold support between ₹1,50,500 and ₹1,47,000 and resistance between ₹1,53,000 and ₹1,58,000.
- Who
- Gold and silver traders, investors, the United States, Iran, the Federal Reserve and market analysts were involved in the developments.
- What
- MCX gold and silver futures fell more than 1% amid higher oil prices, rising bond yields, a stronger dollar and increased expectations of interest-rate hikes.
- Where
- The declines were reported on the Multi Commodity Exchange of India and in global markets, while the related military escalation involved the United States and Iran.
- When
- Wednesday, 2 September, with prices reported around 9:05 AM; upcoming US employment data was also highlighted for Wednesday and Friday.
- Why
- Higher oil prices raised inflation concerns, while rising bond yields, a firmer dollar and expectations of higher interest rates reduced the appeal of non-yielding bullion.
Bearish market outlook
Support and recovery levels
Near-term gold direction
Bearish market outlook
Jigar Trivedi and Ravi Singh expected continued weakness because higher oil prices, bond yields and rate-hike expectations were pressuring bullion.
Support and recovery levels
The article notes that strong exchange-traded-fund demand and the broader debasement theme remain supportive, although these factors had not overcome the near-term pressure.
Gold technical levels
Bearish market outlook
Ravi Singh said gold had fallen below the 21-day exponential moving average near ₹1,55,000 and could move toward support near ₹1,47,000 unless it reclaimed ₹1,55,000–₹1,58,000.
Support and recovery levels
Jigar Trivedi identified support at ₹1,51,000, while Manoj Kumar Jain placed support at ₹1,50,500 and ₹1,49,100, with resistance at ₹1,53,000 and ₹1,54,400.
Silver technical levels
Bearish market outlook
The fall in silver reflected the broader weak trend in precious metals.
Support and recovery levels
Manoj Kumar Jain identified silver support at ₹2,32,000 and ₹2,30,000, and resistance at ₹2,38,000 and ₹2,41,000.
Key facts
- MCX gold price
- October futures fell 1.03% to ₹1,50,164 per 10 grams.
- MCX silver price
- December futures fell 1.26% to ₹2,32,464 per kilogram.
- Brent crude
- Prices rose more than 1% toward $96 per barrel.
- US dollar index
- The dollar index rose to a two-week high of 99.80.
- Bond yields
- The US 10-year yield reached 4.82%; Japan’s reached 3%, and UK 10-year gilts reached 5.23%.
- Fed rate expectations
- Markets were pricing close to a 70% probability of a September rate hike, according to the article.
- Upcoming data
- The ADP employment report was due Wednesday and nonfarm payrolls were due Friday.
Quotes
Jigar Trivedi
Senior Research Analyst at IndusInd Securities
“Gold prices decline as investors anticipate interest rate hikes by the US Federal Reserve following a sharp rise in global bond yields and oil prices. Global bond yields climbed amid mounting inflationary pressures and growing expectations of imminent rate hikes. Fed Chair Kevin Warsh’s pledge to combat inflation further reinforced the hawkish outlook.”
livemint.com
“Markets are now pricing close to a 70% probability of a September Fed rate hike, significantly increasing the opportunity cost of holding gold. Although the broader debasement theme and strong ETF demand remain supportive, the near-term combination of higher oil, yields and Fed hike expectations keeps the bias bearish.”
livemint.com
Sources
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