- Gold prices struggle to rise despite falling crude oil due to Fed's hawkish outlook
- Spot gold traded near $4,270 after hitting $4,330 intraday, silver around $68.30
- US-Iran ceasefire and lower oil eased inflation, boosting gold and silver demand
Gold prices are finding it difficult to sustain momentum despite a sharp drop in crude oil prices, as traders remain wary of the US Federal Reserve's hawkish policy outlook. While easing tensions in the Middle East and lower oil prices have reduced inflation concerns, expectations of higher US interest rates are limiting gains in precious metals, according to Kotak Securities.
Spot gold traded around $4,270 per ounce on Thursday after touching an intraday high of $4,330, while spot silver hovered near $68.30 after climbing as high as $69.85 earlier in the session.
Kotak Securities said the decline in crude oil prices following the US-Iran ceasefire agreement and prospects of the Strait of Hormuz reopening helped revive buying interest in gold and silver. However, those gains remained capped after the Federal Reserve maintained a cautious tone on monetary policy.
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Although the Fed kept interest rates unchanged, policymakers signalled that another rate hike could be on the table later this year. Markets are currently pricing in an 85% chance of a rate increase by December, a factor that has strengthened the dollar and weighed on bullion prices.
"The rebound was supported by lower crude oil prices following the U.S.-Iran ceasefire agreement, which eased inflation concerns and encouraged renewed buying in precious metals. However, gains remained limited after the Fed maintained a hawkish stance," Kotak Securities said.
The brokerage added that ETF outflows, reduced investor participation and a stronger greenback continue to act as headwinds for gold. At the same time, steady physical demand from China, ongoing purchases by central banks, geopolitical uncertainty and the broader de-dollarisation trend are helping prevent a sharper decline.
"The near-term outlook remains mixed, but resilient physical demand and strategic buying should help limit downside risks despite a more hawkish monetary policy backdrop," the brokerage noted.
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Support Levels In Focus
With bullion markets at a crucial juncture, traders will be closely watching key support zones:
- Spot Gold: Support is seen at $4,240, followed by $4,200.
- MCX Gold August Futures: Immediate support lies near Rs 1,50,500, with the next level at Rs 1,49,000. A breach of these levels could push prices below the Rs 1.5 lakh mark.
- Spot Silver: Support levels are placed at $67.50 and $66.80.
- MCX Silver July Futures: Key supports are seen around Rs 1,08,000 and Rs 1,06,500.
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