Gold traded lower on MCX on July 16 as escalating tensions between the US and Iran fueled concerns of higher inflation, prompting the US Federal Reserve to hike rates this year. August gold futures fell 0.45% to Rs. 1,41,205. September silver futures declined 0.67% to Rs. 2,19,150. Meanwhile, Brent crude futures fell 0.21% to $84.77 per barrel. US West Texas Intermediate (WTI) declined 0.09% to $79.53 per barrel.
According to the CME FedWatch Tool, traders now expect a 73% chance of a December rate hike by the Fed.
24K gold fell by Rs. 28 to Rs. 1,43,290 per 10 grams, while 22K gold also backed by Rs. 25 to Rs. 1,31,350. By city, Mumbai and Kolkata mirrored prices at Rs. 1,43,290, while Delhi was at Rs. 1,43,400, and Chennai at Rs. 1,43,460.
US gold prices fell on Thursday amid escalating Middle East conflict, which erased recent optimism over easing inflation.
Spot gold was down 0.6% at $4,034.42 per ounce. US gold futures for August delivery lost 0.3% to $4,039.90.
Spot silver fell 1.1% to $57.14 per ounce. Platinum eased 0.6% to $1,664 and palladium edged 0.3% lower to $1,309.86.
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"Gold is declining as the escalating attacks in the Middle East continue to push oil prices sharply higher this week, keeping concerns about inflation alive," said Jigar Trivedi, a senior research analyst at IndusInd Securities.
"June's inflation figures did not reflect the impact of the latest escalation in the US-Iran conflict, as the interim peace union reached last month has effectively unravelled," Trivedi added.
Internationally, gold has support at $4,022 and $3,989, while resistance is at $4,084 and $4,110 per troy ounce, and silver has support at $56 and $54.40, while resistance is at $58.80 and $60 per troy ounce.
On MCX, gold has support at Rs. 1,41,000 and Rs. 1,40,250, and resistance at Rs. 1,42,650 and Rs. 1,43,300, while silver has support at Rs. 2,17,700 and Rs. 2,14,000 and resistance at Rs. 2,24,000 and Rs. 2,26,600.