On Monday, gold prices experienced a decline, with futures contracts for the two precious metals decreasing by approximately 1% and 2% respectively on the Multi Commodity Exchange of India. This downturn followed Donald Trump’s directive for US military forces to initiate a blockade of the Strait of Hormuz, which heightened tensions in the Middle East and increased demand for safe-haven assets. In the early trading hours of Monday on MCX, gold futures with a June expiry experienced a decline of over 0.7%, falling to Rs 1,51,551 per 10 grams, which translates to a decrease of Rs 1,101 per 10 grams. Silver futures with May expiry on MCX experienced a decline exceeding 2%, settling at Rs 2,37,961 per kg, equivalent to Rs 5,313 per kilogram.
In the international market, gold prices declined to a near one-week low, influenced by a stronger dollar. Concurrently, a rise in oil prices, following unsuccessful U.S.-Iran peace negotiations, heightened inflation concerns and tempered expectations for interest rate reductions by the Federal Reserve this year. Spot gold experienced a decline of 0.6%, settling at $4,718.98 per ounce, following a drop to its lowest level since April 7 earlier in the trading session. Spot gold has experienced a decline exceeding 11% since the onset of the U.S.-Israeli conflict regarding Iran on February 28. Among other metals, spot silver declined by 2% to $74.23 per ounce, platinum decreased by 0.5% to $2,034.95, whereas palladium increased by 1% to $1,535.77. In response to Trump’s threats of a blockade, Iran’s Revolutionary Guards issued a warning that any military vessels approaching the Strait would be regarded as a violation of the ceasefire and would be met with severe and decisive action. The recent developments follow the unsuccessful peace talks facilitated by Pakistan in Islamabad over the weekend, which did not yield an agreement.
Manoj Kumar Jain noted that elevated crude oil prices and CPI inflation exceeding the Federal Reserve’s target rates are diminishing the likelihood of interest rate reductions. He noted that the dollar index might experience a rebound following the unsuccessful US-Iran peace talks, which could in turn constrain the gains of precious metals. “We are experiencing very high price volatility in both precious metals, but silver prices could hold their key support level of $62.00 per troy ounce, and gold prices could also hold $4,470.00 per troy ounce this week on a closing basis. The analyst noted, “We expect gold and silver prices to remain volatile this week amid volatility in the dollar index, volatility in crude oil prices and uncertainty on the US-Iran peace deals.”
“Gold has support in the range of 4740-4680, with resistance positioned at 4840-4884 per troy ounce. Silver exhibits support at 74.00-70.70, while resistance is noted at 78.80-80.40 per troy ounce in today’s session.” At MCX, gold exhibits a support range between Rs 1,51,100 and Rs 1,49,200, with resistance identified between Rs 1,53,800 and Rs 1,55,000. In contrast, silver shows support at Rs 2,40,000 to Rs 2,34,400, while resistance is noted between Rs 2,47,700 and Rs 2,51,000. “We suggest waiting for some clarity on the U.S. and Iran peace deal for taking positions in gold and silver,” the analyst stated.