Gold Prices Decline on MCX Amid Strengthening US Dollar and Rising Inflation Worries

Gold Price Declines Amid Weak Global Cues and Rising Inflationary Pressures

Gold prices in the domestic futures market declined on Friday, 22 May, due to weak global cues, a stronger dollar, and concerns over rising inflationary pressures that may lead to rate hikes across major economies. The MCX gold June futures were down 0.25% at ₹1,59,202 per 10 grams, while MCX silver July futures were 0.43% down at ₹2,73,690 per kg around 9:05 am.

In the US, gold prices looked set for their second consecutive weekly loss as higher oil prices, driven by the Middle East conflict, raised speculations of interest rate hikes by the US Federal Reserve. As a non-yielding asset, gold prices tend to fall during periods of elevated interest rates. The US dollar hovers near a six-week high level, making greenback-denominated bullion more expensive for buyers in other currencies.

Gold has been under pressure over the last two months since the US-Iran war started, as a sharp jump in crude oil prices has driven the US dollar higher while stoking fears of an inflation flare-up. Most experts now feel that the US Federal Reserve and even the Reserve Bank of India may start hiking interest rates this year. Oil prices remain elevated amid persisting uncertainty over a potential US-Iran peace deal.

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Comparison of Gold Prices

According to Ravi Singh, Chief Research Officer (Research) at Master Capital Services, MCX Gold futures continue to trade in a volatile consolidation phase after the recent rally, with prices holding above all key EMAs, indicating that the broader trend still favors bulls. However, a decisive move above ₹1,60,300 is required to trigger fresh upside momentum towards the ₹1,64,000 zone.

On the downside, immediate support is placed near ₹1,57,500, and a sustained break below this level may drag prices toward ₹1,53,000. Until a breakout on either side, range-bound movement is likely to continue. According to Manoj Kumar Jain of Prithvifinmart Commodity Research, gold has support at $4,510 and $4,467, while resistance is at $4,580 and $4,615 per troy ounce. Silver has support at $74.20 and $72, while resistance is at $79.10 and $81.20 per troy ounce in today's session.

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Support and Resistance Levels