Gold, Silver prices off day’s high: Should investors buy the dip amid strong dollar, US-Iran tensions?

Gold and silver prices slipped from the day’s high on Friday amid strength in the dollar index and a decline in U.S. jobless claims, while geopolitical tensions between the U.S. and Iran supported safe-haven demand.

Gold futures on Friday opened at Rs 1,55,105.00 per 10 grams compared with the previous close of Rs 1,54,819.00, marking a rise of Rs 286.00 or about 0.18 per cent. Silver futures opened at Rs 2,43,874.00 per kilogram against the previous close of Rs 2,41,393.00, up Rs 2,481.00 or around 1.03 per cent.

International and Domestic Settlement on Thursday

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On Thursday, gold and silver settled on a mixed note in the international markets. Gold April futures contract settled at $4,997.40 per troy ounce, down 0.24 per cent. Silver March futures contract settled at $77.635 per troy ounce, up 0.05 per cent.

In the domestic market, both precious metals ended lower. Gold April futures contract settled at Rs 1,54,819 per 10 grams with a loss of 0.60 per cent, while silver March futures contract settled at Rs 2,41,393 per kilogram with a loss of 1.18 per cent.

Impact of US Data and Dollar Index

During Thursday’s session, gold and silver witnessed high volatility. Prices gained in early trade but slipped from their highs after U.S. jobless claims dropped to 2,06,000 last week against expectations of 2,23,000. The lower-than-expected claims data supported the dollar index, which surged to a two-week high amid fading chances of U.S. Federal Reserve rate cuts.

The strengthening dollar weighed on precious metal prices. However, tensions between the United States and Iran supported safe-haven buying and limited the downside.

The U.S. trade deficit widened to $70.3 billion last week against expectations of $55.5 billion. The wider deficit also lent some support to gold and silver prices.

Expert View by Manoj Kumar Jain

Manoj Kumar Jain said, “Gold and silver prices are off their day’s highs amid strength in the dollar index and better-than-expected U.S. jobless claims data.” He said that geopolitical tensions between the U.S. and Iran are supporting safe-haven demand for precious metals.

He added, “We are witnessing very high price volatility in both gold and silver.” According to him, silver prices could hold support at $63.90 per troy ounce, while gold prices could hold support at $4,770 per troy ounce on a closing basis this week.

Jain said that gold has support at $4,964-4,915 per troy ounce and resistance at $5,055-5,122 per troy ounce in the international market. Silver has support at $74.40-72.00 per troy ounce and resistance at $80.00-82.40 per troy ounce.

Outlook and Trading Strategy

In the domestic market, he said gold is having support at Rs 1,53,150-1,52,200 per 10 grams and resistance at Rs 1,55,800-1,57,500. Silver is having support at Rs 2,36,600-2,31,000 per kilogram and resistance at Rs 2,45,500-2,51,000.

“We expect gold and silver prices to remain volatile in today’s session amid volatility in the dollar index, U.S.-Iran tensions, ahead of key U.S. economic data and movement in the rupee,” Jain said.

He suggested, “Investors can consider buying gold on dips around Rs 1,53,300 with a stop loss below Rs 1,52,000 for targets of Rs 1,55,500-1,56,400.”

Market participants are now awaiting key U.S. economic data for further direction. Traders said volatility in global cues, currency movement and geopolitical developments are likely to keep precious metals prices range-bound with sharp intraday swings.