Gold Price Jumps 1% on MCX as Dollar, Crude Oil Prices Decline Following US-Iran Ceasefire Extension

Gold Prices Surge Amid Positive Global Cues and Ceasefire Extension

On Wednesday, 22 April, gold prices jumped by more than 1% on the Multi Commodity Exchange (MCX) in early deals, driven by positive global cues and a decline in the US dollar and crude oil prices. The US President Donald Trump extended the ceasefire with Iran, allowing for further peace talks, which contributed to the surge in gold prices.

MCX gold June futures rose by more than ₹2,000, or 1.3%, to ₹1,53,699 per 10 grams, while MCX silver May futures jumped by more than ₹4,700, or nearly 2%, to ₹2,49,423 per kg in early trade. International gold prices also rose, while the US dollar index declined by 0.10% following a fall in crude oil prices.

Gold prices have been volatile in recent times, driven by a rise in the US dollar due to elevated crude oil prices. Since the US-Iran war started on February 28, domestic spot gold prices have declined more than 4% on the MCX.

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The sharp upmove in crude oil prices and lingering uncertainty surrounding the US-Iran conflict have increased concerns of an inflation flare-up, dimming the prospects of near-term rate cuts by the US Federal Reserve. This has kept gold prices under pressure.

According to Reuters, US Federal Reserve chief nominee Kevin Warsh denied that he had promised the US President to cut interest rates. Warsh's comments were aimed at assuring US senators that he would act independently of the White House while acting as the Fed Chair.

Jigar Trivedi, Senior Research Analyst at IndusInd Securities, pointed out that gold prices are influenced by Trump extending the ceasefire and the Senate confirmation hearing of Federal Reserve Chair nominee Kevin Warsh, who pledged to act independently.

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Manoj Kumar Jain of Prithvifinmart Commodity Research provided technical support levels for gold and silver. According to Jain, gold has support at ₹1,50,500 and ₹1,48,800 and resistance is at ₹1,52,800 and ₹1,54,200. For silver, the support levels are at ₹2,40,000 and ₹2,36,600, while the resistance levels are at ₹2,48,000 and ₹2,51,500.

"We suggest holding long positions of gold until it holds the ₹1,48,000 level on a closing basis and book profit around the ₹1,54,000 and ₹1,55,000 range," said Jain. He also suggested avoiding taking long positions in silver as it breached the ₹2,45,000 level yesterday.