Gold prices are likely to remain range-bound this week on the Multi Commodity Exchange of India and COMEX as investors await the release of the US consumer price index later this week. Analysts said that the yellow prices are likely to remain volatile as inflows in exchange-traded funds were offset by a sharp rise in oil prices, which could dampen interest rate cut expectations.
"Gold and silver are under pressure at the start of this week, reversing last week's gains. The trigger is a sharp escalation in the US-Iran standoff -- with Washington announcing plans to blockade the Strait of Hormuz following the collapse of weekend peace talks in Pakistan," said Renisha Chainani, head of research at Augmont Gold for All.
She said geopolitical risk remains high, rising energy-driven inflation and the prospect of tighter monetary policy are creating headwinds for non-yielding assets like gold and silver.
In the physical market, gold prices were getting support from an increase in pre-Akshaya Tritiya buying and a correction last week. Global gold exchange-traded funds saw an inflow of 21 tonnes at the start of April, according to the World Gold Council.
Gold prices are seen range-bound this week with Rs 144,000 per 10 grams as support and a resistance at Rs 155,000, said Manoj Jain, director at Prithvi Finmart. On COMEX, gold has support at $4,470 an ounce, while resistance is seen at $4,840. "If gold price sustains above $4,800 level, then a further rally is expected towards $5,000 level," Jain said.
Money managers trimmed their net long position in COMEX gold by 1,759 lots to 92,113 as of April 7, indicating bearish sentiment for the yellow metal, according to Commodity Futures Trading Commission data.
Gold holdings with SPDR Gold Trust, the world's largest gold-backed ETF, rose by 1.43 tonnes to 1,052.42 tonnes last week. The fund has a market value of $160.97 billion.
At 2:05 p.m., the most active June gold contract was at Rs 152,080 per 10 grams, and the same month contract on COMEX was at $4,753.10 an ounce.
Silver prices are expected to come under pressure due to profit-taking and a strength in the dollar index. The white metal saw a sharp surge last week after US President Donald Trump announced a two-week ceasefire.
Silver has resistance around $77 an ounce, if prices sustain above this level, it can touch levels of $82 and $87, Chainani said.
The spot gold-silver ratio, also known as the Mint ratio, traded at 63.51 on Monday, indicating that silver had outperformed gold. The ratio measures the ounces of silver required to buy an ounce of gold. The ratio was 62.58 on Friday.
At 2:25 p.m., the most active May contract on the MCX was down 1.9% at Rs 238,600 per kg, while the same-month contract on COMEX was 2.6% lower at $74.50 per ounce.
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