Gold Rate Dips on MCX Amid Profit Booking and Strengthening Dollar, while Crude Oil Prices Remain Supported by Geopolitical Tensions with Iran

Gold Prices Dip on Profit Booking Amid US Dollar Strength

On Tuesday, April 7, the gold rate on the Multi Commodity Exchange (MCX) declined due to profit booking, as the US dollar index remained above the 100 mark, weighing on gold prices. The US dollar's strength is largely attributed to President Donald Trump's renewed aggression against Iran, which has kept Brent crude oil prices above $110 a barrel, fuelling demand for the US dollar. At around 9 am IST on Tuesday, Brent Crude was trading over 1% higher at $111 per barrel.

The MCX gold June futures slipped by ₹350, or 0.20%, to ₹1,49,625 per 10 grams, while MCX silver May contracts declined by nearly ₹1,600, or 0.70%, to ₹2,31,800 per kg in early deals on Tuesday. Gold and silver rates have seen a significant correction since the war in West Asia began, as rising crude oil prices drove the US dollar higher and raised concerns about inflation, dimming the prospects of a near-term rate cut by the US Federal Reserve.

A strong US job market has also limited gains of precious metals. According to recent data, the US economy created 1,78,000 jobs in March, far exceeding expectations of 65,000 jobs, with the unemployment rate dropping to 4.3%. This has contributed to the decline in precious metal prices.

Read also: Treasury Yields Experience Largest Increase in Two Weeks Following Release of Labor Market Data

Comparison of MCX Gold and Silver Prices

Analysts suggest that gold has support at ₹1,48,500 and ₹1,47,200, while resistance is at ₹1,51,100 and ₹1,52,600. Silver has support at ₹2,29,200 and ₹2,25,000, and resistance at ₹2,36,600 and ₹2,41,000. According to Jigar Trivedi, Senior Research Analyst at IndusInd Securities, MCX gold June futures may find support near ₹1,49,000 per 10 grams and appreciate during the session. MCX silver May futures may find support near ₹2,32,000 per kg, in tandem with the global trends.