On October 4, 2023, MCX gold prices experienced a decline, primarily attributed to the strengthening of the US dollar. Gold October futures on the Multi Commodity Exchange were trading at Rs 56,864 per gram, marking a decrease of Rs 63 or 0.11%. Silver rates also witnessed a drop of 0.41%, with Silver December futures trading at Rs 67,115 per kg on the MCX.

Factors Affecting Gold Prices

Gold prices retreated, approaching seven-month lows, as a result of an ascending US dollar and rising bond yields, spurred by robust US jobs data. These factors have created expectations of further monetary policy tightening. Spot gold saw a 0.1% decline, reaching $1,820.70 per ounce, while US gold futures dropped by 0.3% to $1,836.20.

Market Volatility Expected

Rahul Kalantri, VP Commodities at Mehta Equities, anticipated continued volatility in the bullion market. He noted that gold has support at $1,810-1,798 and resistance at $1,835-1,848. In INR terms, gold has support at Rs 56,010 – 55,810 and resistance at Rs 56,580 – 56,750. For silver, support is at $20.80-20.66 and resistance at $21.24-21.40, while in INR terms, support is at Rs 66,700-65,850 and resistance at Rs 67,940–68,550.

US Economic Data Impact

The yield on US 10-year notes exceeded 4.8% due to strong economic data, reaffirming the US economy’s resilience to high borrowing costs. This has increased expectations that the Federal Reserve may need to maintain elevated interest rates. Key economic data, including the US ISM Services PMI and ADP Non-farm employment change, are being closely monitored by traders for insights into the economy. Positive US data is likely to further bolster yields and exert downward pressure on bullion prices, according to Ravindra V.Rao, VP-Head Commodity Research at Kotak Securities.