Gold Rate Declines on MCX Amid Profit Booking and Geopolitical Developments

Gold Prices Decline on MCX Amid Global Market Volatility

The gold price declined on the Multi Commodity Exchange (MCX) on Thursday morning, following a strong 6% gain in the previous session due to a hike in import duties on precious metals. As of 9:10 am, MCX gold June futures were trading at ₹1,61,897 per 10 grams, a 0.18% decline. MCX silver July futures were down 1.07% at ₹2,97,027 per kg.

The previous session saw a significant surge in gold and silver prices, with gold June futures jumping nearly 6% and silver July futures surging more than 7.5% after the government hiked import duties on gold and silver to 15%. The focus remains on the ongoing talks between U.S. President Donald Trump and Chinese President Xi Jinping, which is the first time in nearly a decade that a US President has visited China.

The discussions are centered on securing a durable trade deal and economic pacts, with potential discussions over the Middle East conflict as well. Additionally, US inflation is rising, fanning worries that the US Federal Reserve may keep rates steady for a longer period and may even consider a hike if inflation shoots up further. The US consumer price index (CPI) for April came at a three-year high of 3.8%, while US producer prices saw their biggest jump in four years last month.

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According to Ravi Singh, Chief Research Officer at Master Capital Services, the domestic duty-led rally is operating alongside complex global cues. "While hotter-than-expected U.S. CPI data has pressured global spot prices by pushing out rate-cut expectations and strengthening the dollar, the domestic price gap created by the duty hike has shielded MCX from these headwinds," Singh said.

Traders are closely monitoring high-stakes discussions between Trump and Xi Jinping regarding trade and the West Asia crisis. Persistent oil-driven inflation and geopolitical instability continue to channel safe-haven demand into bullion, providing a solid foundation for the current bullish trajectory, Singh added.

Higher interest rates tend to weigh on gold as it is a non-yielding asset. Manoj Kumar Jain of Prithvifinmart Commodity Research said gold has support at $4,681 and $4,634, while resistance is at $4,740 and $4,770 per troy ounce, and silver has support at $86.60 and $84.00, while resistance is at $92 and $95 per troy ounce in today's session.

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On the MCX, Jain said gold has support at ₹1,60,200 and ₹1,58,000 and resistance at ₹1,64,400 and ₹1,66,600, while silver has support at ₹2,94,400 and ₹2,88,000 and resistance at ₹3,04,000 and ₹3,10,000. According to Singh, the market remains aggressively bullish, having successfully established a "higher high, higher low" pattern in this new price territory.

Singh said crucial support levels have now shifted significantly higher to ₹1,59,000 and ₹1,56,000, while immediate overhead resistance is pegged at ₹1,65,000. "As long as prices sustain above these reinforced floors, the upward momentum is expected to persist," Singh said.