30 Jun , 2021 By : Kanchan Joshi
Gold in India continued to be under pressure today as prices dipped to near 3-month low while silver eked out minor gains. On MCX, August gold futures edged lower to Rs46,518 per 10 gram while silver rose 0.16% to Rs68381 per kg. MCX gold has support around Rs46,000 while faces resistance at Rs47600, say analysts. So far this month, gold has fallen about Rs2,700 so far this month. And from last year's high of Rs56,200, the precious metal is down about Rs10,000 per 10 gram.
In international markets, gold rates edged lower to $1,763.63 per ounce, heading for its biggest monthly drop in four years. The prices of the precious metal are down 7.5% for the month. Fed's sudden hawkish turn and a rebound in US dollar weighed on gold.
A Bloomberg gauge of the greenback is poised for the biggest monthly gain since March 2020, adding pressure on the precious metal.
A sooner-than-expected Fed rate hike will increase the opportunity cost of holding non-yielding gold. A top Fed official on Tuesday said he was "very optimistic" about the economy and that the central bank could start raising interest rates next year.
Technically, "gold prices continue to be volatile with negative bias. However, a direct drop below $1745 would trigger another round of long liquidation for the day. An unexpected rise above $1795 may negate the view and take prices higher," says Geojit.
Among other precious metals, silver rose 0.3% to $25.82 per ounce while platinum gained 0.3% to $1,070.38.
The risk-on rally in US equity markets also weighed on gold. Data Tuesday showed U.S. consumer confidence soared in June to a fresh pandemic high as Americans became more upbeat about the economy and job market. Moderna Inc. said its vaccine produced protective antibodies against the delta variant.
Earlier this month, Fed signalled sooner than expected timing and pace of interest-rate increases.
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