Gold and silver prices climb on MCX as dollar, crude oil prices decline on hopes of US-Iran truce | Stock Market News
Gold and silver prices climbed in morning deals on the MCX on Monday, 3 August, amid a decline in the US dollar, following a sharp drop in crude oil prices after US President Donald Trump said that talks with Iran will take place on Monday.
MCX gold October futures were 0.13% up at ₹1,43,557 per 10 grams, while MCX silver September contracts were 0.40% up at ₹2,18,061 per kg around 9:10 AM.
Crude oil benchmark plunged over 5% to trade near $83 per barrel, while the dollar index declined by 0.50% to 99.42, making the greenback-denominated bullion cheaper for buyers in other currencies.
Trump, on 2 August, said that talks with Iran will take place on Monday, but did not set a deadline for an agreement. Trump's statement raised hopes for an agreement with Tehran to reopen the Strait of Hormuz and resolve the impasse over the West Asian country's nuclear capabilities.
Earlier, on August 1, Trump said on his social media platform that Iran and other countries in the region had sought time to complete a deal that would lead to "the immediate, complete and total" reopening of the Strait of Hormuz and “an end to Iran's nuclear threat.”
"Gold edged higher after U.S. President Donald Trump delayed a fresh military strike against Iran, easing geopolitical tensions and triggering a sharp decline of nearly $7 per barrel in oil prices. Softer energy prices reduced fears of persistent inflation, while the U.S. Dollar Index slipped below the 100 mark, lending additional support to bullion," Ravi Singh, Chief Research Officer at Master Capital Services, noted.
An end to the US-Iran conflict will be a major positive for gold prices. However, the prospects of rate hikes remain a key headwind for the precious metal.
The US Federal Reserve kept interest rates steady in its July policy meeting but signalled that rate hikes remain a possibility in the near future.
As per news agency Reuters, three US Federal Reserve officials who dissented at the July policy meeting in favour of a 25 bps rate hike expressed concerns last Friday that without an immediate increase in short-term borrowing costs, inflation will remain above the Fed's 2% target. Inflation has been above the Fed's 2% target for five years.
This week, market participants will keenly observe US job openings data, the ADP employment report, weekly jobless claims and the nonfarm payrolls report.
As per Singh, as long as gold holds above ₹1,40,000, the preferred strategy remains buy on dips. On the upside, ₹1,45,000 will act as the immediate resistance, while a sustained move above this level could extend the recovery towards ₹1,46,700, which coincides with the 55-day EMA.
Manoj Kumar Jain of Prithvifinmart Commodity Research said international gold has support at $4,014 and $3,980 and resistance is at $4,074 and $4,110 per troy ounce, while silver has support at $56.80 and $56.30 and resistance is at $59.40 and $60 per troy ounce in today’s session.
MCX gold has support at ₹1,42,750 and ₹1,42,200, and resistance is at ₹1,44,000 and ₹1,44,550, while silver has support at ₹2,15,500 and ₹2,14,000 and resistance at ₹2,19,000 and ₹2,20,500, said Jain.
"We suggest buying gold on dips around ₹1,42,800, with a stop loss below ₹1,41,800 for the target of ₹1,44,550 and also suggest buying silver on dips around ₹2,16,000 with a stop loss below ₹2,13,300 for the target of ₹2,21,000," said Jain.
Disclaimer: This article is for educational purposes only and does not constitute investment advice. The views and recommendations expressed are those of individual analysts or broking firms, not Mint. We advise investors to consult with certified experts before making any investment decisions, as market conditions can change rapidly and circumstances may vary.
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