Gold and silver prices experienced a slight uptick on Monday, May 27th, marking a modest rebound after recent declines. Spot gold, after hitting its lowest point since May 9th on Friday, saw a 0.4% increase, reaching $2,342.73 per ounce by 0543 GMT. Similarly, US gold futures climbed by 0.4% to $2,343.60 per ounce. Despite this rise, both gold and silver had undergone significant declines from their recent peaks earlier last week, shedding more than $100 per ounce.
Spot silver also showed an upward trend, rising by 1.6% to $30.83 per ounce. In the Indian futures market, gold prices edged higher despite investors scaling back expectations of a Federal Reserve interest rate cut. MCX gold futures for June 5th traded up by 0.47% or ₹336, reaching ₹71,592 per 10 grams. Meanwhile, MCX Silver futures for July 5th surged by 1.49% or ₹1,345, reaching ₹91,893 per kg.
The rise in gold prices came as traders assessed diminishing hopes of US interest rate cuts, particularly ahead of an inflation report scheduled for later in the week. City Index senior analyst Matt Simpson noted, “I suspect gold can manage a small bounce from current levels before retesting the $2,280-$2,300 per ounce zone, which could see losses extended if US data continues to outperform.”
Although gold is traditionally considered an inflation hedge, the prospect of higher interest rates tends to increase the opportunity cost of holding non-yielding assets like gold. Despite fluctuations, the overall outlook for gold prices remains under pressure, especially with the Federal Reserve maintaining a cautious stance on interest rates amidst a strengthening dollar.
Rahul Kalantri, VP Commodities at Mehta Equities, highlighted that gold prices have experienced their largest weekly drop in eight months, falling nearly 5% from their peak, with similar declines observed in silver prices. However, robust Chinese buying and geopolitical tensions continue to provide some support for both gold and silver prices.
Looking ahead, Kalantri outlined support and resistance levels for gold and silver, emphasizing that geopolitical tensions and economic data releases will likely influence market sentiment and price movements in the coming days.
