Gold prices opened on the Multi Commodity Exchange (MCX) on Thursday at Rs 62,270 per 10 grams and hit an intraday low of Rs 62,248. In the international market, prices hovered around $2,034.78 per troy ounce.
Meanwhile, silver opened at Rs 70,841 per kg and hit an intraday low of Rs 70,841 on the MCX. The price hovered around $22.5 per troy ounce in the international market.
COMEX Gold prices wavered before the US PCE data and closed marginally lower on Wednesday as investors remained cautious. However, some support was rendered amid the drop in yields and the dollar after a downward revision in the US Q4 GDP. Data showed that the US economy expanded an annualised 3.2% in Q4 2023, slightly below 3.3% in the advance estimate, following a 4.9% rate in Q3.
Meanwhile, three Federal Reserve officials said the pace of interest-rate cuts will depend on incoming economic data, suggesting the path to lower borrowing costs may look different than in previous rate-cutting cycles. Boston Fed President Susan Collins and New York’s John Williams said the Fed’s first rate cut would likely be appropriate “later this year,” while Atlanta’s Raphael Bostic said he’s currently pencilling in a cut for some time this summer. The Fed’s preferred PCE price index will be in the spotlight for the day. After the release of hotter-than-expected CPI and PPI for January, the Fed’s preferred PCE price inflation is also expected to see an uptick.
The core PCE is seen rising 0.4% m/m, the second straight monthly acceleration in a gauge that’s largely been receding over the past two years. Hotter-than-expected inflation numbers might be a headwind for gold prices.
COMEX Silver prices extended declines and closed at a two-week low amid weakness in the industrial metals on Chinese demand concerns. Hawkish comments from Fed officials weighed on the bullions, despite a decline in dollar and yields after downward revision in US GDP data for Q3. Risk sentiments might remain limited ahead of the much-awaited US PCE price index, which might provide further cues on the Fed’s policy path. Investors might also watch for a slew of Manufacturing PMIs due tomorrow.
Also read: The US has 97 female billionaires, India among Top 5: Study
Also read: Bharat Series number plates: Is insurance coverage for BH series vehicles expensive?
Jateen Trivedi, VP Research Analyst, LKP Securities, said, “Gold prices remained weak, declining by Rs 211 in MCX to reach Rs 62090, driven by strength observed in the US Dollar index, which surpassed $104. This uptick in the dollar exerted downward pressure on gold, causing it to trade below the 26-day moving average at Rs 62200.”
The ongoing week is marked by significant data releases, with US GDP numbers scheduled for this evening and the Core PCE index data tomorrow. Despite these data-driven events, Gold prices have not received substantial support, leading to continued weakness.
“Looking ahead, the key support level for gold stands at Rs 61800, and a breach of this level could potentially push prices further down towards Rs 61000. Traders and investors should closely monitor the upcoming data releases and market dynamics to gauge the direction of Gold prices and identify potential trading opportunities,” said Trivedi.