Yellow metal falls after Powell testimony; silver below Rs 60,250 level

Yellow metal falls after Powell testimony; silver below Rs 60,250 level

Synopsis
Gold futures for August delivery fell 0.22 per cent to Rs 50,791 per 10 grams. Silver futures for July delivery declined 0.67 per cent to Rs 60,243 per KG in early trade.

NEW DELHI: Gold futures fell on Thursday morning, as the dollar stayed stable after the comments made by the US Fed Chair Jerome Powell in his testimony to the US Senate Banking Committee. Silver futures fell over half a per cent in early trade.

Powell said the Fed is not trying to engineer a recession to stop inflation but is fully committed to bringing prices under control even if doing so risks an economic downturn.

The dollar index, which compares the greenback against a basket of six major currencies, stayed almost flat at the 104.12 level. Gold shares an inverse relationship with the dollar.

Gold futures for August delivery fell 0.22 per cent to Rs 50,791 per 10 grams. Silver futures for July delivery declined 0.67 per cent to Rs 60,243 per KG in early trade.

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In his testimony, Powell acknowledged that a recession was "certainly a possibility" and events in the last few months around the world had made it more difficult to reduce inflation without causing one. Analysts said the safe-haven demand may keep a cap on the downside in gold prices.

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“Geopolitical uncertainty and rising concerns of an economic slowdown are likely to support the precious metals. Gold has support at $1,828-1,816, while resistance is at $1,852-1,861. Silver has support at $21.10-20.85 and resistance at $21.65-21.95,” said Rahul Kalantri, VP Commodities, Mehta Equities.

In rupee terms, Kalantri said, gold has support at Rs 50,540–50,210 and resistance at Rs 50,980–51,240, adding that silver has support at Rs 60,120-59,550 and resistance at Rs61,380–61,710.

A Reuters poll showed the Fed will deliver another 75-basis-point interest rate hike in July, followed by a half-percentage- point rise in September, and won't scale back to quarter-percentage-point moves until November at the earliest.

Gold up by Rs 230, trading at Rs 51,990 per 10 gm; silver down by Rs 300

The prices of silver went down by Rs 300 with the precious metal trading at Rs 60,200 per kg Gold became dearer in Friday's early trade, as the yellow metal's price increased by Rs 230 from the previous day's rate with 10 gram of 24-carat gold selling at Rs 51,990. Meanwhile, 10 gram of 22-carat gold, after a decrease of Rs 200, is trading at Rs 47,650.

The prices of silver, on the other hand, went down by Rs 300 with the precious metal trading at Rs 60,200 per kg.

Gold prices were flat on Friday but on course for their second straight weekly decline, with worries over major central banks potentially implementing big interest rate hikes to target runaway inflation weighing on bullion demand.

Spot gold was last up 0.1% to $1,824.72 per ounce at 0215 GMT, after hitting a one-week low of $1,820.99 earlier in the session. U.S. gold futures fell 0.2% to $1,825.90.

Although bullion is often seen as an inflation hedge, higher interest rates and bond yields increase the opportunity cost of holding gold, which yields nothing.

The price of 10 gram of 24-carat gold in Delhi, Kolkata, and Bangalore is Rs 51,990. Whereas, 10 gram of 22-carat gold is trading at Rs 47,650 in Delhi, Kolkata, and Bangalore. In Chennai, 10 gram of 24-carat gold and 22-carat gold is trading at Rs 52,040 and Rs 47,700 respectively.

In Delhi, Mumbai, and Kolkata, silver is trading at Rs 60,200 per kg. In Chennai, Bengaluru, Hyderabad, and Kerala, one kg of silver is currently selling at Rs 66,000.

Edited by : R. Reena