Gold and silver prices saw significant increases on Tuesday due to a weakening US dollar and a drop in energy prices following indications from President Donald Trump about potential resolution in the Middle East. MCX gold April futures rose by 1.15% to Rs 1,62,150 per 10 grams, while MCX silver May futures surged by 3.68% to Rs 2,77,000 per kg around midday. In the global market, spot silver approached $82.50 per ounce, and spot gold climbed to $5,082.51 per ounce.
President Trump’s comments hinting at a possible de-escalation with Iran led to the market recovery, although he cautioned that US military actions could intensify if the Strait of Hormuz remained blocked. Analysts noted that a reduction in conflict could result in lower energy expenses, potentially alleviating inflation concerns and reducing the likelihood of central banks raising interest rates, thereby supporting gold, which does not yield interest.
Oil prices experienced a sharp decline on Tuesday, with Brent futures dropping by as much as 10.85% to an intraday low of $88.22 per barrel from the previous day’s close of $98.96 per barrel. By mid-morning, they were trading at $92.50, marking a 6.44% decrease. The dollar index also fell by 0.44% to 98.74, making dollar-denominated gold more affordable for foreign buyers.
Investors are closely monitoring the US consumer price index for February, scheduled for release on Wednesday, and the Personal Consumption Expenditures index, set for Friday, to assess inflation trends and the likelihood of Federal Reserve interest rate adjustments. The majority of traders anticipate the Fed maintaining interest rates at the conclusion of its upcoming policy meeting on March 18, according to various market indicators.
An analyst mentioned that gold has support levels at Rs 1,58,000, with resistance at Rs 1,75,000 and Rs 1,80,000, while MCX silver has support at Rs 2,50,000 and Rs 2,60,000, and resistance at Rs 2,80,000 and Rs 3,00,000.
