Gold prices ticked lower on Monday in the international markets having shed nearly 1 percent in the previous session, as strong U.S. jobs data cemented the view that the Federal Reserve would continue its policy of aggressive interest rate hikes. U.S. gold futures were down 0.4 percent at $1,703.4 while spot gold was down 0.1 percent at $1,693.19 per ounce. On the Multi-Commodity Exchange (MCX) this morning, gold contracts were trading 1% lower at Rs 51,440 for 10 grams, while silver prices were down 2.28 % at Rs 59,399 for a kilogram.
Rahul Kalantri Mehta Equities’, VP of Commodities said, Silver is trading close to $20 per ounce in response to stronger-than-expected U.S. labor market data, while gold has tested support at $1,700 per ounce. This has caused the bullion market to move into negative territory. The initial reaction to the report was strong selling pressure on gold, which caused it to drop to a session low The dollar index and U.S. bond yields were bolstered by encouraging U.S. data.
Selling in precious metals was sparked when the dollar index surpassed the 112.50 thresholds. Support and resistance levels for gold are $1682 and 1670, respectively. Support for silver is located in the range of $19.65 to 19.48, while resistance is found in the range of $20.17 to 20.35. The support and resistance levels for gold in rupees are Rs 51,620 and Rs 51,440, respectively. Support and resistance levels for silver are respectively Rs 60,050-59,340 and Rs 61,280-61,610.
Deveya Gaglani, Research Analyst at Axis Securities told, A stronger-than-expected non-farm payroll report, which once again raised the possibility of an aggressive rate hike and the expectation of hawkish policies moving forward, ended a feeble attempt by gold to breakthrough and sustain above $1720. However, because of the ongoing geopolitical unrest, a drop in the dollar index may spark purchasing activity at lower levels. Around the $1670 level, there is significant support for Spot Comex Gold. As long as the aforementioned barrier is not breached, we anticipate prices to move in a range between $1670 and $1720.