Gold prices in India today touched near all-time high, tracking global rates. Gold futures on MCX jumped 0.6% 56,175 per 10 grams at day’s high, close to August 2020 high 56,200. Silver futures also jumped 0.4%. 69415 per kg. In the international market, gold touched an eight-month high of $1,873.72 due to a fall in the dollar. Bullion also got a boost as China – the world’s biggest gold consumer – reopened its borders.
Analysts say likely weakening of the dollar is the main factor Sleep The recent US data raised hopes of a slowdown in the rate hike pace by the Federal Reserve. In the international market, spot silver rose 0.5 per cent to USD 23.94 an ounce. Higher rates dampened interest in non-yielding gold, as they did for the majority of 2022.
“The dollar slipped as US wage growth fell to 0.3%, below the expected 0.4%, prompting bets that slowing wage growth could prompt the Fed to ease its policy stance.” Markets largely ignored job additions and a decline in the unemployment rate. The US economy added 223,000 jobs in December, beating expectations by 200,000 while the unemployment rate fell to 3.5%. Not only that, The ISM Services PMI fell to 49.6 in December, slipping into contraction for the first time since May 2020, and down sharply from November’s reading of 56.5,” said Ravindra V. Rao, Head Commodity Research, Kotak Securities Ltd.
Traders will now assess Fed Chair Jerome Powell’s speech at a central bank conference later this week and US consumer price index data.
“Gold has support at $1858-1845 while resistance lies at $1885-1898. Silver has found support at $23.72-23.55, while resistance lies at $24.30-24.48. Gold has support against INR 55,640-55,450, while at the resistance level 56,080, 56,450. Silver has support near Rs 69,050-68,580, while facing resistance 69,920–70,580,” said Rahul Kalantri, VP Commodities, Mehta Equities.
Following softening US economic data, analysts now expect the US Fed to hike interest rates by 25 basis points at its February meetings as the economy slows ahead after aggressive rate hikes in 2022.
Axis Securities has neutral stance on gold and recommends ‘buy-on-dips’ strategy.
“In the last two months, gold prices Support has come from the observed cool-off in US bond yields. Based on current macroeconomic developments, gold will remain a preferred asset class till the uncertainties over the Russia-Ukraine conflict subside and will continue to attract investments as a proven hedge against other asset classes,” the brokerage said. (with agency inputs)
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