- Gold and silver prices fall amid US inflation and West Asia geopolitical tensions
- Kotak Securities lowers support levels; silver may drop below $60 per ounce
- US-Iran conflict raises crude oil prices and disrupts global energy supply
Gold and silver prices are facing mounting pressure as rising US inflation, escalating geopolitical tensions in West Asia and growing expectations of a Federal Reserve rate hike weigh on investor sentiment. Analysts at Kotak Securities have revised key support levels lower for both precious metals, warning that silver could slip below the $60-per-ounce mark if selling pressure intensifies.
The outlook comes after gold extended its recent decline, falling around 2.3% to below $4,170 per ounce. According to Kotak Securities, the selloff was triggered by a sharp escalation in tensions between the United States and Iran following military exchanges near the Strait of Hormuz, a critical artery for global oil shipments.
US forces reportedly targeted Iranian positions after the downing of an American helicopter near Oman, while Iran responded with missile strikes on multiple US targets. The renewed conflict has heightened concerns about prolonged disruptions to global energy supplies and driven a fresh surge in crude oil prices.
At the same time, inflationary pressures in the United States have intensified. Data released by the Bureau of Labor Statistics showed consumer prices rose 4.2% in May from a year earlier, marking the strongest increase since early 2023. Core inflation, which excludes food and energy prices, rose 0.2% month-on-month and 2.9% annually.
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The inflation spike has led traders to reassess the Federal Reserve's policy path. According to Kotak Securities, markets are increasingly pricing in the possibility that the US central bank may need to keep monetary policy restrictive for longer, with the CME FedWatch Tool indicating nearly a 75% probability of a rate hike by the end of the year.
For bullion investors, higher interest rates typically reduce the appeal of non-yielding assets such as gold and silver, contributing to downside pressure on prices.
Kotak Securities has revised its technical outlook for precious metals. Spot silver is expected to find support at $62.64, followed by $61.79 and $59.02, while resistance levels are placed at $65.41, $66.26 and $69.03. A break below the final support level could see silver trade below the $60 mark.
On MCX, Silver July futures have support at Rs 2,30,191, Rs 2,28,009 and Rs 2,20,947, while resistance is seen at Rs 2,37,253, Rs 2,39,435 and Rs 2,46,497.
For gold, spot prices have support at $4,125.5, $4,100.5 and $4,019.3. MCX Gold August futures are expected to find support at Rs 1,48,128, Rs 1,47,444 and Rs 1,45,230, with resistance at Rs 1,50,342, Rs 1,51,026 and Rs 1,53,240.
Adding to market uncertainty, US President Donald Trump warned Iran of "paying a price" for prolonged negotiations to end hostilities. His remarks pushed Brent crude above $93 a barrel, with analysts noting that any further military escalation could drive oil prices into the mid-$90s or higher. Elevated oil prices, in turn, could reinforce inflation concerns and strengthen the case for tighter monetary policy, creating additional headwinds for precious metals in the near term.
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