MCX Gold Silver Prices Slip: The safe-haven metals are being hit hard by a higher U.S. dollar index and rising U.S. Treasury yields. Traders are looking ahead to key U.S. inflation reports on Thursday. Yesterday the psychological level of $1700 has been breached and is once again testing the levels of $1650-1640.
We don’t see any sustained rally on the upside as the US dollar is expected to remain strong ahead of US inflation data on Thursday. Any relief rally will get sold into unless gold manages to sustain above $1700. In MCX, weak rupee is helping gold to sustain above 50500. We would recommend sell on rise till 52000 is not breached on the upside. Above 52000, one can take a long position.
MCX gold may experience a pull back ahead of crucial incoming data which is US CPI and minutes of the Fed’s last meetings. The dollar index may find it difficult to go above 114, still we expect it to stay volatile. The investment demand has been lackluster , the holding at the SPDR GOLD ETF has continued to drop only. We recommend to short on every bounce for Rs. 50,800 per 10 gram.
COMEX gold trades 0.1% lower near $1670/oz extending losses from yesterday’s session when it slipped nearly 2% to below the crucial $1700/oz mark. Despite geopolitical tensions and global slowdown concerns, gold has not seen much safe haven buying as investors are largely moving towards the dollar index. Gold prices might remain under pressure today as the dollar continues to gain momentum and US 10-year treasury yields rose to near 4% ahead of FOMC meeting minutes and speeches by several Fed members.