Gold and silver prices gain as dollar and US treasury yields retreat from recent highs

Gold prices opened on the Multi Commodity Exchange (MCX) on Tuesday at Rs 59,009 per 10 grams and hit an intraday low of Rs 58,949. In the international market, prices hovered around $1,922.94 per troy ounce. Meanwhile, silver opened at Rs 73,700 per kg and hit an intraday low of Rs 73,675 on the MCX. The price hovered around $24.26 per troy ounce in the international market.

Gold and silver prices gained as the dollar and Treasury yields retreated from recent highs ahead of crucial US inflation and jobs data this week that could clarify further monetary policy tightening measures.

The US dollar dipped against its major crosses, while benchmark US 10-year Treasury yields moved further away from their highest levels since 2007 hit last week.

Manav Modi, Analyst, Commodity and Currency at MOFSL, said, “Economic data last week were a bit mixed as preliminary PMI data from major economies were quite disappointing; on the other hand, US weekly jobless claims and core durables goods orders data were reported better than expectations.”

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There was no major change in sentiments after the Jackson Hole symposium as Governor Powell reiterated his stance from the previous meeting about calming the inflation further and being data dependent.

“Markets are now awaiting a slew of economic readings from the world’s largest economy this week, including Q2 GDP data, PCE inflation, and nonfarm payrolls. An earlier reading on GDP showed that the US economy grew far more than expected in the second quarter, indicating that activity had not cooled as much as the Fed initially expected,” said Modi.

Along with growth, if inflation continues to remain sticky and the labour market shows resilience, it could further weigh on metal prices.

Amit Khare, Associate Vice President at GCL Broking, said, “MCX Gold and Silver gave a positive closing yesterday. October Gold closed at 58887 (0.42%), and September Silver closed at 73612 (0.09%). Bullion’s daily charts are looking attractive. We can see good upside movement in the near future. Momentum Indicator RSI also indicates the same. So, traders are advised to make fresh buy positions in Gold and Silver near the given support level one with the stop loss of support level two and book near the given resistance levels: Gold October Support 58700/58400 and Resistance 59100/59300. Silver September Support 73200/72400 and Resistance 74200/75000.”