Gold and silver prices edged lower on Thursday, May 18. On the Multi Commodity Exchange (MCX), gold futures were trading at Rs 60,153 per 10 grams, after recording a fall of 0.06 percent. Silver futures were trading at Rs 72,557 per kg, after witnessing a dip of 0.21 percent.

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Globally, gold prices steadied as the dollar pulled back slightly from a seven-week peak. Spot gold held its ground at $1,983.79 per ounce by 0249 GMT. US gold futures steadied at $1,986.60 per ounce, according to news agency Reuters.

The trigger

According to Rahul Kalantri, VP Commodities, Mehta Equities Ltd, gold prices came under pressure below the psychological $2,000 mark in view of a firm US dollar and treasury yields. The US Dollar has been in favor due to favorable US data and while the debt-ceiling negotiations continue in Washington.

The dollar index eased on the day, after hitting a seven-week high in the previous session, partly due to traders dialing back expectations of a rate cut by the Federal Reserve this year.

However, there was some improvement in optimism over the possibility of an agreement on the US debt ceiling as US President Joe Biden expressed confidence an agreement will be reached.

Kalantri said he expects gold and silver to remain volatile in today’s session.

The outlook

"Gold could remain in the $1,965-$2,020 per ounce range over the next two weeks, but the general trend remains fairly weak, as increasing optimism around the debt ceiling is also likely to heap pressure on bullion," said Edward Meir, metals analyst at Marex.

As per Kalantri, gold has support at $1980-1965 per ounce while resistance is at $2005-2015 per ounce. Silver has support at $23.55-23.42 per ounce, while resistance is at $24.05-24.22 per ounce. In rupee terms, gold has support at Rs 59,860-59,680 per 10 grams, while resistance is at Rs 60,420, 60,590 per 10 grams. Silver has support at Rs 72,020-71,550 per kg, while resistance is at Rs73,150–73,620 per kg.

Investment

Experts say that the current outlook for MCX Gold prices is moderately bearish, given the recent developments in the US economy. Hence, the long-standing rule now should be to keep gold at 5 percent to 10 percent in an investment portfolio.

According to Windmill Capital, the equity markets are expected to remain volatile due to inflation and slowdown concerns and gold will continue to remain in focus as investors look to move towards safety.