Gold prices traded slightly lower in the early trade in the domestic futures market on May 10, tracking weak global cues and weak demand from the spot market. In the global markets, gold prices traded lacklustre as traders await US inflation data due later in the day, which could influence the US Federal Reserve's monetary policy stance.

Around 9:30 am, MCX Gold (June 5 expiry) was trading 0.28 per cent lower at ₹61,247 per 10 gram.

In the previous session, MCX Gold ended 0.8 per cent higher, extending gains into the second consecutive session. In the spot market, gold prices rose by ₹450 to ₹61,300 per 10 grams in the national capital amid a rise in precious metal prices internationally, according to HDFC Securities.

What should be your strategy for gold today?

Gold prices are likely to stay volatile for the session as investors will remain cautious ahead of the US retail inflation data.

As per brokerage firm SMC Global Securities, MCX Gold may trade in the range of ₹61,100-61,700 while silver may also trade in the range of ₹76,900-77,800 where buy near support is advised.

The brokerage firm pointed out that if US inflation remains moderately controlled, it may lead to a pause in Fed rate hikes, which will weaken the dollar and support gold.

Manoj Kumar Jain of Prithvifinmart Commodity Research said the fear of US debt defaults and economic recession is supporting precious metals. However, recovery in the dollar index and the possibility of further Fed rate hikes are restricting gains.

Read all market-realted news here

Jain expects gold and silver prices to remain volatile in today’s session ahead of the US inflation data.

"Gold prices only sustain above $2,055 and silver prices sustain above $26 per troy ounce levels could show further strength otherwise it will test its support levels again. Gold has support at $2,028-2,014, while resistance at $2,054-2,070 per troy ounce. Silver has support at $25.65-25.40, while resistance is at $26.20-26.55 per troy ounce," said Jain.

"At MCX, gold is having support at ₹61,150-60,900 and resistance at ₹61,660-61,845 while silver is having support at ₹76,800-76,220 and resistance at ₹77,950-78,500. We suggest staying away from gold and silver in today's session ahead of the US inflation data," said Jain.

The gold price has been moving upward of late after the US Fed hiked rates by 25 bps on May 3. Higher interest rates are usually positive for gold prices while they are negative for equity markets. Since rate hikes are seen as factors which could slow down economic growth, investors tend to turn towards safe-haven assets such as gold and the dollar to get better returns.

Economic uncertainty, too, is considered positive for gold prices since investors consider yellow metal as a safe investment when the economy is under pressure.

Disclaimer: The views and recommendations given in this article are those of individual analysts and brokerage firms. These do not represent the views of Mint. We advise investors to check with certified experts before taking any investment decisions.