Gold Prices Slide on MCX Amid Persistent Inflation Concerns and Ongoing US-Iran Diplomatic Discussions

Gold Price Declines Amid US Dollar Uptick and Inflation Concerns

On Monday, May 4, the gold rate on the Multi Commodity Exchange (MCX) declined in morning deals due to an increase in the US dollar and persistent concerns over a spike in inflation caused by higher-for-longer crude oil prices. MCX gold June futures traded 0.23% lower at ₹1,51,005 per 10 grams, while MCX silver July futures were 0.15% down at ₹2,50,549 per kg around 9:10 am.

The dollar index inched up slightly by 0.06% despite crude oil prices easing after US President Donald Trump announced that the US would attempt to free up ships stranded in the Strait of Hormuz. However, the lack of clear progress in U.S.-Iran peace talks kept prices supported above $100. Trump on Saturday said that he would review Tehran's new proposal, which includes a 14-point plan to end the conflict and create a new framework for the Strait of Hormuz waterway.

The ongoing West Asian conflict has kept gold and silver prices volatile due to elevated crude oil prices, which have fueled fears of an inflation flare-up that could lead to higher interest rates for a longer period. Last week, the US Federal Reserve kept its interest rates unchanged at 3.5%–3.75% and flagged inflationary risks. Data showed that the Personal Consumption Expenditures Price Index jumped 0.7% in March, the biggest gain since June 2022.

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According to Manoj Kumar Jain of Prithvifinmart Commodity Research, gold has support at $4,632 and $4,600, while resistance is at $4,700 and $4,740 per troy ounce, and silver has support at $74.40 and $72, while resistance is at $78.80 and $80.40 per troy ounce in today's session. On the MCX, Jain noted that gold has support at ₹1,50,650 and ₹1,49,800, while resistance may be at ₹1,52,200 and ₹1,53,100. MCX silver has support at ₹2,47,700 and ₹2,44,400 and resistance at ₹2,54,000 and ₹2,58,000.

Jain suggested booking profits in long positions of gold around ₹1,53,000 and long positions of silver around ₹2,55,000. Fresh buying can be initiated in gold around ₹1,49,800 and in silver around ₹2,54,000 as the market is stuck in a range.