Rising crude prices amid disruptions in the Strait of Hormuz and a stronger US dollar are beginning to weigh on bullion, with analysts warning of further downside if key technical levels give way.
According to analysts at Kotak Securities, spot gold is under pressure and immediate support is placed at $4,651/oz.
“If prices fall below this level, the next support is seen at $4,627/oz, and a deeper fall could take the metal towards $4,550/oz,” the report noted.
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The weakness comes as higher US Treasury yields reduce the appeal of non-yielding assets, even as geopolitical tensions remain elevated.
For spot silver, analysts see immediate support at $73.13/oz. A breach of this level could drag prices towards $72.30/oz, with further downside opening up towards $69.62/oz. The metal, which has an industrial component, is also facing pressure from concerns over global growth amid persistent macro uncertainty.
In the domestic market, MCX Gold June futures are also showing signs of strain. Kotak Securities places immediate support at Rs 93,809 per 10 grams. “Below this, the next support is seen at Rs 93,458, and extended weakness could push prices towards Rs 92,699,” analysts said, adding that the overall trend remains vulnerable to moves in the dollar and crude oil.
Similarly, MCX Silver May futures have immediate support at Rs 73,893 per kg. A sustained break below this could see prices slipping to Rs 72,305, while a sharper correction may take the metal down to Rs 69,629, the report added.
Analysts emphasise that bullion is currently being pulled in opposite directions. While geopolitical tensions and supply disruptions in oil markets typically support safe-haven demand, the dominance of a strong dollar and expectations of prolonged tight monetary policy are capping upside.
“With crude staying elevated and macro pressures building, bullion could remain under pressure in the near term,” Kotak Securities said, highlighting that a break of key supports may accelerate the downside move.
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