Gold, silver prices ease on MCX: Why bullion prices are under pressure

Gold, silver prices ease on MCX: Why bullion prices are under pressure


Gold and silver prices traded lower on the Multi Commodity Exchange (MCX) on Wednesday, June 3, as investors assessed ongoing geopolitical tensions in West Asia alongside expectations that the US Federal Reserve may keep interest rates elevated for longer.

MCX Gold August futures were trading around ₹1.59 lakh per 10 grams, while silver futures hovered near ₹2.64 lakh per kg. In the physical market, 24-carat gold was quoted at around ₹1.56 lakh per 10 grams, while 22-carat gold was priced at approximately ₹1.43 lakh per 10 grams.

Internationally, spot gold traded near $4,498 an ounce. Prices have remained supported by safe-haven demand amid the escalating US-Iran conflict and elevated crude oil prices, which have remained close to $96 per barrel, raising concerns about inflationary pressures.

However, gains in bullion have been capped by stronger-than-expected US economic data, which has reinforced expectations that the Federal Reserve could maintain a higher-for-longer interest-rate stance. US job openings unexpectedly increased in April, prompting investors to scale back expectations of near-term monetary easing.

Market participants are closely tracking developments in West Asia after reports of continued military activity involving Israel, Iran and US forces near the Strait of Hormuz, a critical route for global oil supplies. At the same time, traders are awaiting a series of US economic indicators, including the ADP employment report, ISM Services PMI and Factory Orders data, ahead of Friday’s closely watched non-farm payrolls report.

According to Kaveri More, Commodity Analyst at Choice Broking, MCX gold prices have declined nearly 4% over the past two weeks amid a stronger US dollar and weakness in the Indian rupee. While the broader trend remains moderately bearish, the August gold contract is currently holding above key support levels near ₹1.57 lakh per 10 grams.

Silver, meanwhile, has shown greater resilience despite recent corrections. More noted that MCX silver continues to trade within a broad range of ₹2,61 lakh-₹2.77 lakh per kg, with the gold-silver ratio remaining near 59-60.

Analysts expect silver to remain range-bound unless a decisive breakout emerges.

Manav Modi, Commodities Analyst, Motilal Oswal Financial services, said gold’s safe-haven appeal is being offset by concerns that elevated oil prices could keep inflation higher, potentially limiting the scope for interest-rate cuts by the Federal Reserve. The brokerage said upcoming US macroeconomic data and the non-farm payrolls report are likely to provide the next major directional cues for bullion prices.



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