Gold Prices on MCX See Volatility Amid Strong Dollar and High Oil Prices
Gold Prices Plummet Due to Elevated Crude Oil Prices and US-Iran Conflict
Gold prices witnessed a volatile trade in the domestic futures market on Tuesday, April 28, as the value of the US dollar surged due to elevated crude oil prices. The MCX gold June futures were down by 0.08% at ₹1,51,603 per 10 grams, while the MCX silver May contracts declined by 0.45% at ₹2,40,728 per kg by 9:20 am.
The ongoing uncertainty surrounding the stalled peace talks between the United States and Iran has been putting pressure on gold prices. According to a Reuters report, US President Donald Trump is not satisfied with Iran's latest proposals, as they failed to address Tehran's nuclear program. Iran has stated that it will not reopen the Strait of Hormuz unless the United States lifts its blockade and ends the war.
Meanwhile, Iran's Foreign Minister Abbas Araghchi expressed satisfaction over his engagement with the Russian leadership on Monday, highlighting the depth and strength of Iran and Russia's strategic partnership. The Brent Crude prices jumped over 1% to $110, driving the dollar index higher. Higher crude oil prices can drive inflation, forcing central banks to keep interest rates higher for a longer period. High interest rates make yield-bearing assets, such as bonds, more attractive, weighing on the yellow metal's appeal.
Read also: Treasury Yields Experience Largest Increase in Two Weeks Following Release of Labor Market Data
Key Central Bank Decisions This Week
The U.S. Federal Reserve is expected to hold interest rates steady on Wednesday, April 29. Additionally, the Bank of Japan's policy decision is due today, and the European Central Bank and the Bank of England will announce policy decisions on April 30.
According to Jigar Trivedi, Senior Research Analyst at IndusInd Securities, gold rates are down as investors assess diplomatic efforts to resolve the US–Iran conflict, which has triggered a major energy supply shock, raising inflation concerns. Investors are also looking ahead to policy decisions from key central banks this week, including the Fed, BoE, and ECB. Trivedi forecasts that MCX gold June contracts may decline to ₹1,51,100 per 10 grams.
| Analyst | Gold Price Forecast | Silver Price Forecast |
|---|---|---|
| Manoj Kumar Jain | Support: $4,681, $4,640; Resistance: $4,724, $4,770 per troy ounce | Support: $74.40, $72; Resistance: $76.20, $78 per troy ounce |
| Support: ₹1,50,800, ₹1,50,000; Resistance: ₹1,53,500, ₹1,54,200 | Support: ₹2,38,800, ₹2,35,000; Resistance: ₹2,44,400, ₹2,47,700 |
Read also: US-Iran Tensions Spark Uptick in Oil Prices Amid Global Market Decline
| Target Price | Jain's Suggestion |
|---|---|
| MCX gold | Buy on dips until holding ₹1,48,800 on a closing basis for targets of ₹1,53,800 and ₹1,55,000 |
| MCX silver | Buy on dips until holding ₹2,35,000 on a closing basis for targets of ₹2,48,000 and ₹2,51,000 |
Investor Takeaway
Gold prices may remain volatile due to strong dollar and high oil prices.
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