Gold and silver prices in India experienced a significant decline on the Multi Commodity Exchange on Thursday, driven by substantial selling pressure. This downturn followed overnight losses in global bullion prices, attributed to indications from the US Federal Reserve regarding a potential interest rate hike later this year. However, the signing of the interim US-Iran peace deal alleviated inflation concerns and bolstered the prices of precious metals. MCX gold rate for August futures contracts opened lower by Rs 1,573, or 1%, at Rs 1,52,306 per 10 grams compared to its previous close of Rs 1,53,879.

MCX silver price for July futures contracts opened lower by Rs 3,807, or 1.51%, at Rs 2,48,000 per kg, compared to its previous close of Rs 2,51,807. During the early session, gold prices on MCX experienced a decline of Rs 1,575, or 1.02%, reaching a low of Rs 1,52,304 per gram. Similarly, silver prices on MCX fell by Rs 6,298, or 2.5%, hitting a low of Rs 2,45,509 per kg. In the international market, gold prices increased by over 1%, recovering from losses incurred in the prior session. This uptick was influenced by a decline in oil prices, which followed a US-Iran interim agreement that alleviated inflation expectations and bolstered demand for bullion.

Spot gold price increased by 1.4% to $4,316.42 per ounce, following a decline of 1.7% on Wednesday. US gold futures for August delivery decreased by 1% to $4,336.70. Spot silver price increased by 1.8% to $69.18 per ounce. The United States and Iran have made public the text of their interim agreement. The 14-point agreement prolongs the ceasefire initially declared in April by an additional 60 days, facilitating negotiations between the two parties for a conclusive truce. Meanwhile, the US Federal Reserve announced its decision to maintain the policy rate within the existing range of 3.50%-3.75%. However, nine of the central bank’s 19 policymakers now anticipate the necessity of increasing the policy rate within this year.

Traders are now assigning an 85% probability to a US rate hike in December, a notable increase from the previous 61% prior to the Fed’s decision, as indicated by the CME FedWatch Tool. Gold tends to diminish in attractiveness when interest rates are elevated, as it does not provide any yield. Jigar Trivedi indicated that the outlook for the MCX gold rate appears weak, with support identified at the Rs 1,51,800 level and resistance positioned at the Rs 1,53,300 level. Trivedi indicates that the outlook for silver prices continues to be subdued, although there is an anticipation of short-covering throughout the day. “MCX silver price has support at Rs 2,42,000 level and resistance is seen at Rs 2,51,000 level,” he stated.