Gold and silver prices slipped on Friday, extending losses for a second straight week as surging crude oil prices and renewed expectations of a US Federal Reserve rate hike dampened sentiment across bullion markets.
Spot gold fell 0.4% to $4,524 per ounce, while US gold futures for June delivery eased 0.4% to $4,524.20. Silver also remained under pressure, with real-time data showing XAG/USD down 1.58% at $75.475 per ounce as of 20:19:30 GMT.
In India, MCX gold June futures declined Rs 501, or 0.31%, to Rs 1,59,105 per 10 grams, while MCX silver July futures dropped Rs 2,320, or 0.84%, to Rs 2,72,563 per kg. Despite Friday's weakness, MCX gold has gained 0.23% this week, while silver remained largely flat.
Bullion prices tracked global cues as Brent crude held above $105 per barrel amid uncertainty surrounding possible US-Iran peace negotiations. Higher oil prices are fuelling inflation concerns, prompting traders to price in a higher probability of tighter monetary policy in the US.
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“Given the current high negative correlation to oil, dollar, and yields, these, especially oil, will set the tone for gold in the upcoming sessions,” Ole Hansen, head of commodity strategy at Saxo Bank, told CNBC.
Markets are now assigning a rising probability to a Fed rate increase before year-end, according to CME Group's FedWatch tool. A stronger dollar, hovering near a six-week high, further weighed on bullion by making gold more expensive for holders of other currencies.
On the technical front, analysts said MCX gold continues to trade in a broad Rs 1,57,500–Rs 1,60,400 range. Choice Broking's Kaveri More said a decisive breakout could determine the next directional move, Live Mint reported. For silver, she sees immediate support near Rs 2,65,000, while a breakout above Rs 2,80,400 could trigger fresh momentum towards Rs 2,86,800 and potentially the Rs 3,00,000 mark.
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