- Gold fell nearly 0.7% to $4,373 after US inflation data eased rate hike fears
- Silver dropped over 1% to around $64.5 per ounce amid profit booking
- MCX gold and silver futures in India declined 0.54% and 0.98% respectively
Gold and silver slipped on Thursday, August 13, capping gains seen after a subdued US inflation report relieved pressure on the US Federal Reserve to raise interest rates.
Spot gold dropped nearly 0.7% to $4,373 on Thursday, reversing from a more than two-month high as investors booked profits after the softer U.S. inflation report had already driven a sharp rally. Silver also fell more than 1% to around $64.5/oz.
Bullion prices in India dipped too, with MCX gold October futures contract declined 0.54% to Rs 1,54,010 per 10 grams, while MCX silver September futures contract fell 0.98% to Rs 2,35,514 per kg.
According to Kotak Securities, the pullback in precious metals highlight a classic “buy the rumour, sell the fact” response, with gold falling lower than key technical support near $4,387. July CPI fell to 3.4% YoY from 3.5%, reducing near-term possibility of US Federal Reserve tightening risks, with September hike expectations falling to 36% from about 55% a week earlier.
What To Expect?
As per the brokerage, the bias on precious metals remains positive as softer inflation, lower rate expectations and persistent ETF accumulation support investment demand. However, it must be noted that elevated positioning, profit-taking and renewed geopolitical demand for the dollar could cap gains. Going ahead, PPI and labour-market data are critical as further disinflation would boost the bullish case, while higher inflation could lift yields and the dollar, delaying the rally.
ALSO READ: Spot Gold Continues Rising After Reclaiming $4,400, Nears $4,500
Technical Levels To Watch
Kotak expects Spot Gold to face support at $4,349.2. If this level is breached, then the metal will find next key support at $ 4327. A furtherdownside will move the next support $ 4256.8 level, the analysts highlighted. Resistance is seen at $ 4419.9, followed by $ 4441.7 and $ 4512.3.
In case of MCX Gold October futures, support levels are placed at Rs 1,53,056, Rs 1,52,528 and Rs 1,50,817. Analysts expect resistance level at Rs 1,54,768, Rs 1,55,296 and Rs 1,57,007
In terms of silver, Kotak estimates support for Spot Silver at $63.73, followed by $ 63.15 and further downside of $61.25. Resistance is seen at $65.63, $66.21 and $68.11.
On MCX, Silver is likely to face support at Rs 2,32,791, Rs 2,31,430 and Rs 2,27,023. Resistance is placed at Rs 2,37,199, Rs 2,38,560 and Rs 2,42,967.
ALSO READ: Gold Rate Falls Below Rs 1.54 Lakh Per 10 Grams, Silver Price Cracks By Rs 3,200 Per Kg On MCX
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