Industry Odisha Bureau, July 6: Gold and silver prices traded quite volatile on the Multi Commodity Exchange (MCX) on Monday. This came after easing concerns over aggressive US Fed rate hikes competed with the strength of the US dollar.
MCX gold August futures initially traded higher before turning negative. At around 9:25 AM, the contract went down 0.12% at Rs 1,47,201 per 10 grams. MCX Silver September futures also slipped 0.46% to Rs 2,36,317 per kg after briefly trading on the positive side earlier this session.
Further, the dollar index edged up 0.10% to 100.98. Meanwhile, Brent crude prices fell about 0.5% to below $72 per barrel.
International gold prices remained nearly two-week high, after weak US employment data eased fears of aggressive interest rate hikes by the Federal reserve. Global bullion prices gained nearly 2% last week. This ended a four week losing streak.
Latest stats suggest that US private employment increased by 98,000 jobs in June. This was below the market expectations of 1,18,000. Nonfarm payrolls also missed estimates, rising by only 57,000 against the expected 1,10,000.
The weaker labor market data also reduced the expectations of a rate hike. According to the CME FedWatch Tool, traders see a 55% probability of a Fed rate hike in September now. This is lower from over 60% before the jobs report. Investors now await the minutes of the Fed’s June policy meeting. Scheduled for later this week, the meeting will help investors with further guidance.
What do analysts have to say?
Market experts believe that the overall outlook for gold and silver trade remains positive despite short-term volatility. Manoj Kumar Jain of Prithvifinmart Commodity Research advises investors to buy gold on dips around Rs 1.46 lakh – Rs 1.45 lakh. Similarly, silver around Rs 2.34 lakh – Rs 2.31 lakh, while maintaining appropriate stop loss levels.
Ravi Singh, Chief Research Officer at Master Capital Services said that market structure remains constructive. Any decline towards Rs 1.45 lakh should be viewed as a buying opportunity. IndusInd Securities Senior Research Analyst Jigar Trivedi expects MCX gold August futures to rebound. This rebound is expected at Rs 1,47,800 per 10 grams, supported by positive global mark sentiment.
