Gold trades lower; RBI MPC meeting, US payroll data in focus

Gold price today: Gold rates declined in the domestic futures market in Thursday's session, reflecting caution ahead of the Reserve Bank of India's Monetary Policy Committee (MPC) decision on Friday. MCX Gold August 5 contracts traded 0.30 per cent lower at ₹98,279 per 10 grams around 1:50 PM.

The RBI MPC is expected to cut the repo rate by 25 bps on Friday, June 6. Experts say that as a rate cut is largely discounted, it may not give a fresh boost to investor sentiment. However, a favourable projection of inflation and growth could weigh on gold prices.

Gold prices have mixed triggers at this juncture. As recent macroeconomic data show signs of a slowdown in the US economy, investors are now focused on the upcoming payroll and unemployment figures, due on June 6, and signals from the US Federal Reserve regarding potential interest rate cuts this year.

"Caution continues to dominate the bullion market as multiple factors could influence price movements in either direction," Aksha Kamboj, Vice President, India Bullion and Jewellers Association and Executive Chairperson, Aspect Global Ventures, observed.

On the geopolitical front, fresh escalations in tensions between Russia and Ukraine are positive for gold prices.

According to Reuters, "Russian President Vladimir Putin told US President Donald Trump on Wednesday that he would have to respond to Ukrainian drone attacks on Russia's nuclear-capable bomber fleet."

Uncertainty over US-China trade relations is also expected to support gold prices. Both countries have accused each other of violating the trade agreement announced in May. Meanwhile, President Trump said Chinese President Xi Jinping is “extremely hard to make a deal with.”

Kamboj underscored that gold is currently trading near record highs, driven by bargain hunters who aim to capitalise on ongoing uncertainties surrounding trade relations between the US, China, and the European Union.

"Should tensions escalate, particularly if Iran rejects a proposed US nuclear deal or if US-China relations worsen, bullion prices may see further upside. On the other hand, upbeat jobs data expected through the week could boost equity markets, potentially prompting profit-taking at these elevated levels," said Kamboj.

Key levels to watch for MCX Gold and Silver

According to Rahul Kalantri, VP of commodities at Mehta Equities, gold has support at $3,340-3,315 and resistance at $3,395-3,420. Silver has support at $34.25-33.90 and resistance at $34.70-34.95.

In INR, gold has support at ₹97,120-96,800 while resistance is at ₹97,750-97,940. Silver has support at ₹100,160-99,350 while resistance is at ₹1,01,950-1,02,750, said Kalantri.

Disclaimer: This story is for educational purposes only. The views and recommendations above are those of individual analysts or broking companies, not Mint. We advise investors to check with certified experts before making any investment decisions, as market conditions can change rapidly, and circumstances may vary.