Gold and silver were trading lower amid negative global cues on Thursday, as US President Donald Trump dashed hopes of an early de-escalation in the Middle East with his address to the nation. The continuance of the war is expected to keep dollar elevated, which will inversely impact the bullion prices.
Spot gold traded 1.54% lower at $4,684.97 an ounce, while spot silver traded 3.13% lower at $72.76 per ounce, as of 8:30 pm IST.
Trump, in his address to the country late on Wednesday, maintained the US' stance that the prospect of Iran having a nuclear weapon was a "threat". On the closure of Strait of Hormuz, Trump said it was the responsibility of the affected countries, and not Washington, to get the vital waterway reopened.
According to analysts at Kotak Securities, spot gold finds immediate support at $4,550 an ounce. If the metal breaches below the mark, it may slip to as low as $4,354.8.
ALSO READ: Silver Crashes Rs 9,000, Gold Slides Rs 3,500 Amid Weak Global Cues
More Downside Ahead?
Spot silver sees immediate support at $69.13. If this level is surpassed, then the yellow metal may slip to as low as $63.9, according to the analysts.
On India's Multi Commodity Exchange, the gold futures slated for June delivery were trading 2.5% lower at about Rs 1.49 lakh per 10 gram, at 9:27 pm IST. The MCX Silver May futures were down by 5.26% at Rs 2.31 lakh.
MCX Gold June futures finds immedate support at Rs 1.46 lakh per 10 grams, as per Kotak Securities analysts. If the level is breached, the new support level will be at Rs 1.4 lakh per 10 grams.
Similarly, MCX Silver May futures have their immediate support at Rs 2.23 lakh per kilogram. If this level is surpassed, the new support level will be at Rs 2.09 lakh per kg.
Notably, a key factor weighing on gold is the surge in US Treasury yields. The 10-year yield has climbed to around 4.45%, reflecting expectations that the Federal Reserve will keep interest rates higher for longer amid potential war-driven inflation.
Higher yields make bonds more attractive relative to gold, which does not generate income. Also, in times of crisis, investors don't always flock to gold alone. A stronger US dollar and higher-yielding debt instruments are currently drawing safe-haven flows, reducing demand for bullion.
ALSO READ: Dollar, Oil, Yields: Why Gold Is Losing Its Safe-Haven Shine Amid US-Iran War
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