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Due to profit booking and a stronger US dollar, the gold rate fell on the MCX on Monday morning, April 6, as the US-Iran dispute kept crude oil prices higher, stoking concerns about inflation. Furthermore, the likelihood of a US Fed rate cut in the near future was further diminished by positive US jobs statistics.
Market Update: Gold and Silver Prices Fall
MCX silver May contracts fell by more than ₹2,800, or more than 1%, to ₹2,29,651 per kg in early transactions, while MCX gold June futures fell by ₹1,400, or almost 1%, to ₹1,48,298 per 10 grams.
The yellow metal remained costly in foreign markets as the dollar index stayed above 100. The skyrocketing cost of crude oil is a major factor in the dollar index’s increase. A spike in commodity prices raises demand for the dollar because crude oil is primarily traded in dollars.
Crude Oil Impact and Dollar Strength
The price of crude oil was at a multi-year high. As the US-Iran conflict, which started on February 28, entered its sixth week, Brent Crude traded close to $110 per barrel on Monday morning.
Strong U.S. nonfarm payrolls figures, however, dampened expectations of a rate decrease by the US Federal Reserve this year, which were already low because of growing concerns about an inflation flare-up amid skyrocketing crude oil prices.
According to Reuters, the unemployment rate dropped to 4.3% as U.S. nonfarm payrolls grew by 1,78,000 jobs in March—the most since December 2024. Experts point to increased price volatility for gold. They advise short-term traders to think about booking rising profits.
Expert Views on Gold Price Volatility
Manoj Kumar Jain of Prithvifinmart Commodity Research stated, “We advise booking profits in long positions on every gain and waiting for some more corrective declines for beginning fresh long positions in gold and silver.”
Due to the US-Iran war, rising crude oil costs, and fluctuations in the dollar index, Jain anticipates that gold and silver prices will continue to be erratic this week.
Jain claims that in today’s session, silver has support at $70.70 and $68 and resistance at $76 and $78.40 per troy ounce, while gold has support at $4,620 and $4,580 and resistance at $4,720 and $4,770 per troy ounce.
MCX Gold and Silver Support & Resistance Levels
According to Jain, silver has support at ₹2,28,000 and ₹2,22,400 and resistance at ₹2,37,700 and ₹2,42,200 on the MCX, while gold has support at ₹1,47,200 and ₹1,45,500 and resistance at ₹1,51,100 and ₹1,53,350.
Gold rates have decreased by almost 12% since the start of the US-Iran dispute, according to Jigar Trivedi, Senior Research Analyst at IndusInd Securities, as rising oil prices increased predictions of interest rate increases and fanned worries about inflation.
Trivedi claims that because the global market trend is sluggish, MCX gold June futures are projected to fall to ₹1,47,500 per 10 kilos. Conversely, the resistance is ₹1,49,500 per 10 grams, according to Trivedi.
Frequently Asked Questions
1. What caused the price of gold to drop on April 6?
Profit booking, a stronger US dollar, rising crude oil prices, and positive US jobs statistics that lowered expectations of a US Federal Reserve rate decrease all contributed to the decline in gold prices.
2. What effect does the US dollar have on the price of gold?
A rising dollar lowers demand for gold by making it more costly for foreign buyers. Demand for dollars rises in response to rising crude oil prices, which indirectly drives down gold prices in international markets.
3. How does the price of gold change in relation to crude oil?
Increased crude oil prices bolster the dollar and heighten concerns about inflation. Increased volatility and downward pressure on prices result from this combination, which lessens gold’s appeal as a safe haven.
4. What are the main gold support and resistance levels?
Short-term trading tactics are guided by gold support levels on the MCX, which are approximately ₹1,47,200 and ₹1,45,500, while resistance levels are close to ₹1,51,100 and ₹1,53,350.
5. What approach do professionals advise traders to take?
Due to the uncertainty surrounding the global economy, experts advise recording profits on price increases and waiting for falls before taking fresh positions.
Conclusion
The strong dollar, rising crude oil costs, and economic data all contribute to the volatility of gold prices. Traders should use caution, carefully book profits, and keep a close eye on important levels of support and resistance.
📊 Gold Market Key Insights
- Gold Decline: Nearly 1% fall in MCX gold futures
- Silver Drop: Over ₹2,800 decline in silver contracts
- Dollar Impact: Strong dollar index above 100
- Oil Influence: Crude oil near multi-year high ($110)
- Market Sentiment: Profit booking and inflation concerns
- Trading Advice: Wait for dips before fresh buying
⚠️ Expert Trading Strategy
- Profit Booking: Sell on rallies in short term
- Entry Strategy: Buy on dips after correction
- Risk Factor: High volatility due to global tensions
- Support Levels: Watch key MCX support zones
- Resistance Levels: Avoid buying near resistance
- Market Outlook: Range-bound with volatility expected
Disclaimer: This article is for educational purposes only. Prices and market conditions can change rapidly. Always consult a financial expert before investing.
