Gold and silver prices in India traded sharply lower on Monday, following losses in international bullion prices, amid rising fears of interest rate hikes.
MCX gold rate for October futures contracts traded lower by Rs 2,287, or 1.46%, at Rs 1,53,994 per 10 grams level. Gold prices fell as much as 1.68% to an intraday low of Rs 1,53,640 level.
MCX silver prices for December futures contracts fell by Rs 2,622, or 1.08%, to Rs 2,39,822 per kg. Silver rates declined as much as 1.49% to an intraday low of Rs 2,38,809 level.
In the international market, gold prices extended decline as risks that the US Federal Reserve will raise interest rates before the end of the year increased after Chairman Kevin Warsh's pledge to fight inflation.
Spot gold price fell 0.7% to $4,422.75 an ounce, while silver price declined 0.4% to $66.12 an ounce.
Warsh reiterated at the Fed's annual conference in Jackson Hole, Wyoming that policymakers will return inflation to their 2% goal, which he said was a firm and fixed target. Traders are now pricing in a more than 50% chance of a hike at the Fed's next meeting in September.
"The hawkish comments from the Fed Chair have increased case for a rate hike in September. Additionally, a stronger dollar is also negative for the yellow metal. The outlook for silver prices also remains weak,” said Jigar Trivedi, Senior Research Analyst at IndusInd Securities.
Market attention now shifts to upcoming U.S. labor market and inflation data, along with key economic releases from major economies, which will be crucial in shaping expectations for the Fed's next policy move and the near-term outlook for gold.
Gold Price Outlook
Trivedi expects MCX gold rate to find support at Rs 1,53,500 level and resistance at Rs 1,54,600.
Support for MCX silver price is seen at Rs 2,39,000 level, and resistance is placed at Rs 2,41,000, Trivedi added.
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