Gold, Silver Prices Dip on Profit-Booking, Stronger Dollar
By Market Desk
Gold and silver futures reversed earlier gains on August 6 due to profit-booking and a strengthening US dollar, impacting precious metal prices.
Gold and silver futures declined on August 6, erasing intraday gains as investors engaged in profit-booking following a recent rally. A stronger US dollar also contributed to the downward pressure on precious metals, making dollar-denominated assets more expensive.
Comex Precious Metals Key Levels
- Comex gold futures fell to approximately $4,290 per troy ounce.
- Gold had reached a six-week high of $4,363 per troy ounce earlier.
- Silver futures retreated to $61.12 per troy ounce.
- Silver had touched the $63 mark intraday.
The recent rally was initially driven by reduced concerns over inflation and US interest rates, alongside signs of de-escalating tensions in the Middle East. This provided an opportunity for investors to secure profits.
Market Drivers and Economic Indicators
- The US dollar index rebounded to 99.8, after an earlier seven-week low.
- De-escalation efforts included reports of Iran drafting an agreement with Oman to reopen the Strait of Hormuz.
US economic data further influenced the market, with ADP reporting a weaker-than-expected addition of only 44,000 private-sector jobs in July. This marked the weakest jobs reading since January, leading traders to trim expectations for a September Federal Reserve rate hike.
Federal Reserve Governor Lisa Cook, however, reiterated her readiness to support higher interest rates if inflation persists, emphasizing that policymakers might not have the luxury of waiting to bring inflation back to the central bank’s 2% target. The Federal Reserve had previously maintained its benchmark interest rate for the fifth consecutive meeting, with market participants now awaiting the US nonfarm payrolls report for additional insights.
Domestic Indian Market Performance
In the domestic Indian market, MCX gold and silver futures also erased their intraday gains, mirroring the international trend and slipping into negative territory.
- Near-month MCX gold futures eased to ₹1,48,500 per 10 grams.
- MCX gold had briefly crossed the ₹1.50 lakh mark.
- MCX silver futures slipped to ₹2,24,322 per kg.