Gold, Silver Prices: 24K, 22K, 18K Lowest Prices To Buy; What Will Drive Yellow Metal From June 3-7

Gold prices continued to post fourth-monthly gains with 24K yellow metal in 10 grams at Rs 72,550 at the start of June. This pristine metal exited May 2024 with a positive bias as 24K, 18K, and 22K gold surged by nearly 2% on a month-on-month basis. In the first trading week from June 3rd to 7th, MCX gold is expected to find support at Rs 70,500 per 10 gram, while resistance is seen at Rs 73,000 level. Meanwhile, silver which outperformed gold in May, is expected to see mixed reaction ahead.

In its weekly outlook report 'Wise Money', SMC Global Securities said that gold prices have posted a fourth consecutive monthly gain, even as the market struggled for momentum ahead of a key U.S. inflation reading that could provide more insight into the Federal Reserve's potential rate cuts later this year.

The brokerage attributed the monthly gains to central bank buying and lingering geopolitical risks.

Further, as per the brokerage, the latest data revealed that the US GDP grew by 1.3% in the first quarter,
below earlier estimates, alongside revised lower headline and PCE price indices. A weaker U.S. GDP read might suggest imminent policy easing, but much depends on inflation progress. Moreover, initial unemployment claims rose in the recent week but stayed above this year's average, suggesting a softening labor market, while corporate profits unexpectedly declined.

Going ahead, the brokerage believes that the focus now turns to PCE inflation, the Fed's preferred inflation measure, to shed more light on the central bank's policy outlook. Meanwhile, traders have reduced expectations for rate cuts after Fed officials recently adopted a hawkish stance, indicating a prolonged path to the 2% inflation target.

While bullion is considered an inflation hedge, higher rates increase the opportunity cost of holding the non-yielding asset, it added.

On the Comex front, SMC's note said, gold prices are stuck between $2,320 and $2,400; a break on either side will define the next course for gold. Silver, on the other hand, may see a correction, potentially finding support near $30.40 and resistance around $33.00.

At home, the brokerage said, this week, "Gold prices on MCX may find support near 70,500 and face resistance near 73,000. Silver may trade in the range of 90,000 to 96,000, with mixed views on its direction.