The record rise in gold and silver prices continues. On the Indian futures market (MCX), gold has crossed the historical figure of ₹ 1.60 lakh per 10 grams, while silver has also reached close to ₹ 2.45 lakh per kg. On Friday morning, August 21, gold was trading 0.52% higher at ₹1,60,250 per 10 grams in the domestic market, while silver was trading at ₹2,45,951 per kg.
The rise got a boost from the American market
This rise in the prices of precious metals in the Indian market has been seen due to the rise in the American markets. In the global market, gold is moving towards gains for the third consecutive week. Gold has received tremendous support due to the weakness in the US dollar and the big announcement of bond buyback by the Treasury there. Spot gold has crossed $4500 per ounce in the international market.
Dollar index falls and bond yields change
The dollar index declined 0.20% and looked set to close the week lower. The weakening of the dollar made it cheaper for buyers with currencies from other countries to buy gold internationally. On the other hand, the US Treasury on Wednesday took a big step and announced doubling the size of buybacks on long-term debt in the next quarter to at least $ 4 billion per operation. The direct effect of this was that the US 30-year bond yield came down at the end of the week.
US-Iran tensions and global concerns
Meanwhile, rising geopolitical tensions between the US and Iran remain a key factor for gold prices. US Vice President JD Vance said on August 20 that the conflict with Iran has now entered a 'new phase'. He made it clear that the Trump administration is placing more emphasis on creating strong economic pressure rather than a large-scale direct military attack.
Master Capital Services expert Ravi Singh said that the US Treasury's decision to increase bond buyback initially brought down the yields, which supported gold prices. However, investors' concerns grew after US debt crossed $40 trillion and yields rose again.
Singh further said that the minutes of the Federal Reserve's July meeting indicated that if inflation remains high, many policymakers may be in favor of increasing interest rates. At the same time, the tension in the Middle East is keeping the inflation outlook bleak. Despite all these headwinds, the overall outlook for gold remains positive due to strong price action and global uncertainty.
Experts' Opinion: Support and Resistance Levels
According to Manoj Kumar Jain of Prithvifinmart Commodity Research, on MCX gold has strong support at ₹ 1,58,000 and ₹ 1,56,650, while resistance is seen at ₹ 1,60,600 and ₹ 1,61,800. On the other hand, silver has support at ₹2,41,000 and ₹2,38,800, while resistance remains at ₹2,46,600 and ₹2,50,000.
(Disclaimer: Experts' recommendations, suggestions and views are personal. Investing in the commodity market is subject to risks, so please consult your financial advisor before making any investment.)