After falling by more than 5% on the domestic market on Thursday, the price of gold continued to decline today, May 12, 2023.
Earlier today, the Multi Commodity Exchange's June 2023 expiry gold futures contract opened lower at Rs. 60,795 per 10 gm and quickly dropped to an intraday low of Rs. 60,750. The price of gold is currently down about 0.20 percent on the world market and is close to its current immediate support levels of USD 2,010.
Likewise, silver rate today remained under the sell-off heat as silver future contract on MCX for July 2023 expiry opened lower at Rs.73,675 per kg and went on to hit intraday low of Rs.73,045 per kg. Today's silver price on the international spot market is roughly 0.60 percent lower and is trading close to levels of USD 24 per ounce.
Why are silver and gold prices declining?: Deveya Gaglani, Research Analyst — Commodities at Axis Securities, commented on the reason why gold and silver rates are currently under pressure: "Weakness in gold and silver price today can be attributed to rise in Dollar Index after better-than-expected US inflation data. The United States' recent publication of new economic data also contributed to highlight the present trends of lower inflation and a sluggish labour market. There is an increasing likelihood that the Federal Reserve will pause its tightening cycle at the upcoming meeting as a result of this.
The analyst from Axis Securities continued by noting that the producer inflation rate decreased more than anticipated in April, supporting expectations for lower prices after a period in which the CPI print was lower than expected.
Anuj Gupta, Vice President of Research at IIFL Securities, said that gold investors should be aware of: "Gold price has immediate support placed at USD 2,010 levels and on breaching this level on closing basis, next support for the yellow metal lies at USD 1,975 levels." He said, the current support level for the gold price on the MCX is Rs. 59,500.
On prognosis for gold and silver prices, Deveya Gaglani of Axis Securities said, “Overall, the present perspective for MCX gold and silver prices are fairly pessimistic, given the recent developments in the US economy and their potential implications for monetary policy."
MCX Commodity Watch: Gold, Silver outlook today
Commodity Market Watch: Gold slips amid global cues, silver rate up