Gold Price Falls on MCX Amid Profit Booking and Rising Hike Hopes
Gold Prices Plummet Amid Stable Dollar and Inflationary Pressures
Gold prices on the Multi Commodity Exchange (MCX) dropped on Friday, May 29, amidst a stable dollar and expectations of a US Federal Reserve rate hike this year. The decline was driven by higher oil prices and increased inflationary pressures.
MCX gold June futures fell by 0.21% to ₹1,56,600 per 10 grams, while MCX silver July futures dropped by 0.38% to ₹2,68,500 per kg around 9:10 am. The dollar index rose by 0.10%, weighing on gold prices after the US inflation rate increased at its fastest pace in three years in April.
According to the Commerce Department, the US Personal Consumption Expenditures (PCE) price index rose 3.8% year-on-year in April, the highest since May 2023. This bolstered expectations of US Federal Reserve rate hikes this year. Meanwhile, crude oil prices declined further, with benchmark Brent Crude dropping to $92 per barrel amid reports that the US and Iran have reached a deal, awaiting President Donald Trump's approval.
Read also: Treasury Yields Experience Largest Increase in Two Weeks Following Release of Labor Market Data
Brent Crude looks set for the biggest monthly loss since 2020. Analysts have mixed views on the future of gold prices. Jigar Trivedi, Senior Research Analyst at IndusInd Securities, predicts that MCX gold June futures may drop to ₹1,56,000 per 10 grams. Ravi Singh, Chief Research Officer (Research) at Master Capital Services, suggests that immediate support is now seen near ₹1,55,200, while the ₹1,54,000 region remains a key level to watch on a closing basis.
| Analyst | MCX Gold June Futures Support | MCX Gold June Futures Resistance |
|---|---|---|
| Jigar Trivedi (IndusInd Securities) | - | ₹1,56,000 per 10 grams |
| Ravi Singh (Master Capital Services) | ₹1,55,200 | ₹1,58,000 |
| Manoj Kumar Jain (Prithvifinmart Commodity Research) | ₹1,56,100, ₹1,55,500 | ₹1,57,700, ₹1,58,650 |
Manoj Kumar Jain of Prithvifinmart Commodity Research said that gold has support at $4,500 and $4,467, while resistance is at $4,574 and $4,600 per troy ounce. Silver has support at $74.40 and $72, while resistance is at $78.80 and $80.40 per troy ounce in today's session. Jain suggests booking profits in gold and silver long positions on every rise amid weekend sessions and US-Iran peace deal negotiations.
Investor Takeaway
Gold prices may continue to fall due to rising inflation and expectations of US Fed rate hikes.
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