Gold was trading lower in India on May 4 but was firm in the international market, tracking a retreat in US treasury yields and dollar, while investors anticipated an aggressive interest rate hike from the US Federal Reserve when it concludes a two-day policy meeting.
At 10.04 am, gold contracts were down 0.46 percent at Rs 50,575 for 10 grams on the Multi-Commodity Exchange (MCX), while silver was up 0.38 percent at Rs 62,720 a kilogram.
On May 3, spot gold was up 0.4 percent at $1,870.56 per ounce in the international market. Prices slipped to $1,849.90 earlier in the session, their lowest since February 16.
Gold gained marginally as the dollar index and treasury yields retreated ahead of the Fed meeting outcome scheduled later in the day.
Investors eyed a widely expected big rate hike, accelerating selling momentum on bullion prices. The hike in interest rate by the Fed lifts the opportunity cost of holding non-yielding gold.
Read more: India’s manufacturing sector sees faster growth amid high inflation in April: PMI
Gold and silver will see selling pressure on May 4 if prices rise towards resistance levels. Gold has resistance at Rs 51,300 and support at Rs 50,500. Silver has resistance at Rs 64,000 and support at Rs 62,500, said Nirpendra Yadav, Senior Commodity Research Analyst at Swastika Investmart.
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Ravindra Rao, CMT, EPAT, VP-Head Commodity Research at Kotak Securities
COMEX gold traded lower near $1,865 a troy ounce amid positioning ahead of the Federal Reserve decision. The Fed is expected to raise the interest rate by 0.5 percent and may support sharper rate hikes in the coming months to control galloping inflation.
The hawkish stance has already pushed gold to mid-Feb lows and unless there is a negative surprise, there is a possibility we may see some relief gains in gold.
Ravi Singh, Vice President and Head of Research, ShareIndia
Gold is showing profit booking on account of gains in the US bond yield and strength in the dollar. However, gains in global energy prices and downbeat US data released last week supported precious metals. Gold prices may correct some more this week.
Buy zone near Rs 50,700 for a target of Rs 51,000
Sell zone below Rs 50,500 for a target of Rs 50,300
Rahul Kalantri, VP Commodities, Mehta Equities
Gold and silver remained firm on May 3 after relentlessly selling on the previous day dragged both metals to a two-and-a-half-month low.
Gold and silver prices are firmer due to short covering by the shorter-term futures traders. The bulls are trying to stop the bleeding in down-trending markets that have been punished by a strong US dollar and rising bond yields.
Read more: Silver prices to outrun gold, touch Rs 1,21,000 per kg by 2025
In international markets, gold closed at $1,868.12 and silver at $22.58 an ounce.
In the domestic market, gold ended 0.29 percent higher at Rs 50,808, while silver was up 0.33 percent at Rs 63,132. However, weakness in the US bond yields, prolonged lockdowns in China and possible drawdown in global economic growth are supporting precious metals.
On May 4, bullion will remain volatile ahead of the Federal Reserve policy meeting outcome.
Gold has support at $1,850-18,38, while resistance is at $1,882-1,895. Silver has support at $22.10-21.80, while resistance is at $22.94-23.22.
In rupee terms, gold has support at Rs 50,550–50,320, while resistance is at Rs 52,110–52,350. Silver has support at Rs 62,650-62,215 and resistance at Rs,63,830–64,210.
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