Gold prices are at a critical juncture as traders weigh escalating geopolitical tensions against mounting expectations of prolonged higher interest rates in the United States. According to Kotak Securities, MCX Gold August futures face strong resistance near Rs 1.51 lakh, a level that could emerge as a key hurdle for the yellow metal in the near term.
The brokerage expects resistance for MCX Gold August at Rs 1,48,732, followed by Rs 1,49,412 and Rs 1,51,613. On the downside, support is placed at Rs 1,46,532, followed by Rs 1,45,852 and Rs 1,43,651.
For spot gold, resistance levels are seen at $4,135.9, $4,163.8 and $4,254 per ounce, while support is expected at $4,045.7, $4,017.9 and $3,927.7.
Silver, meanwhile, continues to trade in a volatile range. MCX Silver July faces resistance at Rs 2,38,564, Rs 2,40,674 and Rs 2,47,503, while support is seen at Rs 2,31,736, Rs 2,29,626 and Rs 2,22,797. Spot silver resistance is expected at $65.38, $66.22 and $68.93, while support lies at $62.66, $61.83 and $59.11.
According to Kaynat Chainwala, AVP Commodity Research at Kotak Securities, the next major trigger for bullion markets will be the outcome of the Federal Open Market Committee (FOMC) meeting.
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"Gold's trajectory will hinge on the FOMC outcome, particularly the updated dot plot and policy guidance for the rate outlook. Any hawkish tilt by the new Fed Chair could add to downside pressure on bullion," she said.
Chainwala added that developments in West Asia will continue to drive volatility, with markets closely watching whether the fragile ceasefire holds. According to her, renewed conflict could push gold below $4,000 an ounce and silver below $60 despite the recent recovery in prices.
Kotak Securities noted that spot gold rebounded more than 0.5% to trade above $4,090 per ounce after briefly approaching the $4,000 mark. Silver gained over 1% to trade near $64 per ounce.
The recovery came after markets reacted to heightened geopolitical tensions following another round of US strikes on Iran and Tehran's announcement regarding the closure of the Strait of Hormuz, a critical route for global oil shipments. The development has intensified concerns over energy supplies and inflation.
However, elevated inflation remains a major headwind for bullion. US consumer inflation accelerated to 4.2% year-on-year in May, with monthly inflation rising 0.5%, the fastest pace in more than three years, largely driven by higher energy prices.
The inflation surge has strengthened expectations that central banks may keep monetary policy restrictive for longer, reducing the appeal of non-yielding assets such as gold.
Kotak Securities also pointed to declining Comex open interest and a break below the 200-day moving average as signs of deleveraging and weakening institutional participation in the bullion market.
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