Gold prices on the Multi Commodity Exchange (MCX) experienced a notable increase on Monday, reflecting gains in international bullion prices spurred by safe-haven demand. This rise comes despite a more than 4% drop in MCX gold prices in July, which some analysts view as a potential buying opportunity.
The MCX gold rate increased by Rs 249 (0.37%) to Rs 68,435 per 10 grams, while the MCX silver price rose by Rs 684 (0.84%) to Rs 82,055 per kilogram. Internationally, spot gold climbed 0.4% to $2,394.88 per ounce, and US gold futures gained 0.5% to $2,393.20.
Gold prices in India declined last week due to customs duty cuts announced in the Union Budget 2024 and concerns over demand in China. Additionally, better-than-expected US Q2 GDP and jobless claims data added downward pressure on gold rates. At the beginning of July, MCX gold was around Rs 71,600 per 10 grams and reached a mid-month high of Rs 74,730. However, prices fell sharply post-Budget 2024, hitting a multi-month low near Rs 67,400 last week.
Analysts expect gold prices to rebound, supported by short covering and several positive factors both globally and domestically. Rahul Kalantri, VP of Commodities at Mehta Equities Ltd, noted that gold and silver prices exhibited significant volatility on Friday, recovering from one-month and three-month lows, respectively. He highlighted that hopes of a US Federal Reserve rate cut and short covering provided support at lower levels.
“The dollar index also declined from its highs ahead of the Fed policy meetings, which further supported gold and silver prices. Moreover, U.S. inflation expectations came in at 2.9%, in line with forecasts, potentially providing additional support for precious metals,” Kalantri said. He added that gold has support at $2378-2362 and resistance at $2412-2428. Silver has support at $27.78-27.55 and resistance at $28.25-28.48. In INR terms, gold has support at Rs 67,980-67,750 and resistance at Rs 68,380-68,550.
Ajay Kedia, Director of Kedia Advisory, identified several key factors supporting gold prices: rising expectations of US Federal Reserve interest rate cuts, a weaker US dollar index, escalating global geopolitical tensions, and increased physical demand in domestic markets post-duty adjustments. "Gold may find support at Rs 67,000 and face resistance at Rs 69,800," Kedia told livemint.com.
