Gold prices remained under pressure on Wednesday after suffering their steepest monthly decline since 2008, with analysts cautioning that the precious metal could witness further downside as expectations of tighter US monetary policy, a stronger dollar and easing geopolitical tensions continue to weigh on sentiment.
According to Kotak Securities, MCX Gold August futures are likely to find immediate support around Rs 1.37 lakh, followed by Rs 1,40,039 and Rs 1,40,713. In the international market, spot gold has support at $3,846.3 per ounce, followed by $3,923.5 and $3,947.4.
Spot gold extended losses for a third consecutive session, slipping below the $4,000-an-ounce mark to its lowest level since November. Silver also weakened, with spot prices falling to around $58 an ounce.
The decline comes as the US dollar strengthened and investors increased bets that the US Federal Reserve could keep interest rates higher for longer. Cleveland Federal Reserve President Beth Hammack said interest rates may need to rise further as inflation remains above the central bank's target.
Market participants are now awaiting remarks from Federal Reserve Chair Kevin Warsh and this week's US employment data for further clues on the policy outlook.
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Adding to the pressure on bullion, progress in US-Iran negotiations has eased geopolitical concerns, reducing demand for safe-haven assets. Stable US job openings data also reinforced expectations of a resilient economy capable of withstanding tighter monetary policy.
Kotak Securities said the combination of hawkish Federal Reserve expectations, a firmer US dollar and easing geopolitical tensions remains the primary headwind for gold. However, any deterioration in US economic data or a renewed escalation in geopolitical risks could revive safe-haven buying.
For silver, Kotak expects spot prices to find support at $53.14 per ounce, followed by $55.85 and $56.68.
On the domestic front, MCX Silver September futures are expected to find support at Rs 2,14,007, followed by Rs 2,20,278 and Rs 2,25,351.
Crude oil prices also remained weak, with Brent crude slipping below $72 a barrel and West Texas Intermediate (WTI) hovering near $68 after registering their steepest quarterly decline since the pandemic.
The brokerage attributed the weakness to easing geopolitical tensions in the Middle East, optimism surrounding US-Iran talks in Qatar and improving tanker movements through the Strait of Hormuz, all of which have reduced the geopolitical risk premium embedded in oil prices.
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