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“Gold prices on Wednesday were headed for their first monthly dip in four as investors tempered their bets of swift and deep rate cuts in the US in the light of a resilient economy, and also awaited remarks from the Federal Reserve due later in the day. The dollar index was on track to mark its best month since September, with an over 2 per cent gain so far in January,” reported Reuters.

The yellow metal is witnessing tepid buying as expectations around swift rate cuts by the US Fed wane.

Gold is often considered a safe-haven asset, and its prices tend to gain in times of economic uncertainty, geopolitical tensions, and interest rate reductions.

Also Read: Gold prices may continue to remain elevated considering global macros and geopolitical factors, says Tapan Patel

As the Israel-Hamas conflict persists, there is growing optimism regarding a potential truce. Simultaneously, on the macroeconomic front, the US economy remains resilient, diminishing the likelihood of the US Federal Reserve initiating interest rate cuts as early as March. These combined factors may exert downward pressure on gold prices.

Also Read: Israel-Hamas War: Israeli soldiers dressed as medical professionals shoot 3 Palestinians in hospital

“Traders are pricing in about 130 basis points (bps) of Fed rate cuts for 2024, down from bets of more than 160 bps at the end of 2023, according to LSEG’s interest rate probability app IRPR. The chances of a March rate cut have dropped to 44 per cent, from about 90 per cent a month ago,” reported Reuters.

MCX Gold for April 5 delivery traded 0.03 per cent up at 62,463 per 10 grams around 10:50 am.

What should be your strategy for gold today?

Experts expect gold prices to remain volatile this week, reacting to the volatility in the dollar index and FOMC outcome.

Manoj Kumar Jain of Prithvifinmart Commodity Research expects gold and silver prices to remain volatile this week amid volatility in the dollar index and FOMC meeting outcomes.

Jain said gold and silver have key support levels at $2,000 and $22 per troy ounce respectively on a closing basis and could hold respective support levels. Any dips in the prices would be a buying opportunity in gold and silver in today’s session.

“Gold has support at $2,038-2,026, while resistance at $2,062-2,076 per troy ounce and silver has support at $23-22.84, while resistance is at $23.50-23.80 per troy ounce in today’s session,” said Jain.

“On the MCX, gold has support at 62,300-62,080 and resistance at 62,620-62,800 while silver has support at 72,000-71,650 and resistance at 72,700-73,100,” Jain said.

He suggests buying in silver around 72,000 with a stop loss of 71,650 on a closing basis for the target of 73,100.

Rahul Kalantri, VP of commodities at Mehta Equities expects gold and silver prices to remain unsettled this week, influenced by fluctuations in the dollar index and the forthcoming FOMC meeting results.

“In terms of technical levels, gold finds support in the range of $2,020-2,008, with resistance at $2,045-2,061. Silver has support at $22.88-22.70 and faces resistance at $23.25-23.38,” said Kalantri.

“In the Indian rupee terms, gold sees support at 62,440-62,270, with resistance at 62,810 and 62,980. For silver, support lies at 71,740-71,080, while resistance is at 72,950 and 73,380,” Kalantri said.

Read all market-related news here

Disclaimer: The views and recommendations above are those of individual analysts, experts and broking companies, not of Mint. We advise investors to check with certified experts before making any investment decisions.

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Published: 31 Jan 2024, 11:06 AM IST

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