Gold prices took a breather after a string of gains over the past few weeks. Yellow metal futures contract for August 2022 ended around €1,000 down from last week’s highs €50,603 per 10g levels. Spot gold prices closed at 1826 an ounce. Citing weakness in base metal prices, MCX silver prices corrected sharply last week by 1.95 to close at €59,749 per kg levels. MCX silver prices corrected 2.57 percent to close at $21.11 an ounce.
According to precious metals experts, spot gold prices have immediate support at $1810 an ounce while strong support lies at $1770. Spot silver price has immediate support at $20.50 while spot silver has strong support at $20. On MCX, gold prices have immediate support at €49,900 levels with strong support being placed €49,200 per 10g levels. They added that MCX silver price has immediate support €58,500 levels while holding strong support for MCX silver price €56,000 levels.
Discussing the reasons for the drop in gold prices, Vipul Srivastava-Research Analyst at Religare Broking Ltd said: “Gold prices have taken a breather back to highs after a string of gains in recent weeks as central banks ramped up their fight against runaway inflation Also, a slump in energy prices along with base metals is likely to offer some respite from rising inflation, which has again hurt the appeal of precious metals and a global economic slowdown limited the downside of the precious metal, which is gaining traction as a safe haven.”
Echoing the views of Vipul Srivastava, Anuj Gupta, Vice President – Research at IIFL Securities said: “Last week MCX gold prices corrected 0.42 percent while the spot market corrected 0.72 percent. Anticipation of another rate hike is putting pressure on gold and silver prices, however weakness in the rupee due to the strength of the dollar is supporting gold and silver prices. Investors are now in quiet mood in this volatile session and we do not see any aggressive trading activity on the Markets. Technically gold finds support at $1810 ( €49,900) and strong support at $1770 ( €49,200) levels. Resistance at $1855 ( €51,300) levels and $1880 levels ( €52,000).”
However, the Religare Broking pundit claimed that gold prices appear to be in better shape compared to the carnage at the industrial metals complex, citing: “While the US President himself has acknowledged in recent statements that rising interest rates are hurting the economy in… could lead to a recession, money could flow to the yellow metal US GDP contracted in the first quarter and is expected to fall to near zero in the second half of the year, signaling signs of economic distress Recent data releases from Japan, the UK, the euro-zone and the United States showed that factory activity remained subdued across all regions in June. The prevailing risk aversion should boost demand for precious metals in the short term. Also, after a robust rally, the dollar is facing a tough hurdle near $105 a barrel and a pause therein could open the door for gold to take the lead as a safe haven.”
Commenting on the silver price outlook, Anuj Gupta of IIFL Securities said: “Silver prices are taking indications of weakness in base metal prices as lower demand is expected on fears of a recession. Silver can find support at $20.50 ( €58,500) and next support at $20.00 ( €56,000) levels. Resistance at $21.50 ( €62,500) levels and $22.00 ( €64,000) levels.”
Disclaimer: The views and recommendations made above are those of individual analysts or brokerage firms and not Mint.
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