Gold prices opened on the Multi Commodity Exchange (MCX) on Friday at Rs 61,651 per 10 grams and hit an intraday low of Rs 61,601. In the international market, prices hovered around $2,004.07 per troy ounce.
Meanwhile, silver opened at Rs 72,671 per kg and hit an intraday low of Rs 72,671 on the MCX. The price hovered around $22.98 per troy ounce in the international market.
Manav Modi, Analyst, Commodity and Currency, MOFSL, said, “Gold prices gained after softer U.S. economic data pushed the U.S. dollar and Treasury yields lower, while market focus shifted to commentary from Federal Reserve officials for cues on the timeline for interest rate cut. U.S. retail sales and industrial production fell more than expected in January.”
“Fed policymakers will probably wait until June before cutting rates; traders bet after the positive jobs and inflation data,” said Modi.
Fed Vice Chair for Supervision Michael Barr, in his comments, mentioned that the path back to 2% inflation “may be a bumpy one”. Meanwhile, Chicago Fed President Austan Goolsbee cautioned against delaying rate cuts for too long. Today, the focus will be on US producer price index numbers and a speech from a Fed official.
Jateen Trivedi, VP Research Analyst, LKP Securities, said, “Gold prices exhibited stability within a narrow range of Rs 61,300 to Rs 61,450, characterised by a minor gap down opening attributed to Comex Gold trading between $1,990 and $1,994 at the start of the session. However, the afternoon session witnessed a recovery in gold prices, with Comex Gold gradually ascending towards $1,997, consequently aiding MCX gold to rise from Rs 61,350 to Rs 61,450.”
COMEX Gold recovered on softer-than-expected retail sales and weekly jobs claims data but is still set for its biggest weekly decline in two months, owing to lingering uncertainty about the Fed rate outlook US retail sales fell by 0.8%, most in 10 months in January, and initial claims for state unemployment benefits fell 8,000 to a seasonally adjusted 2,12,000.
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Federal Reserve Bank of Atlanta President Raphael Bostic said there’s no rush to cut interest rates with the US labour market and economy still strong, and cautioned it’s not yet clear that inflation is heading sustainably to the central bank’s 2% target, as per the Kotak Securities research report.
“The panic selling observed on Tuesday evening seems to have generated buying interest among positional buyers, particularly as prices dipped below $2,000 and Rs 61,500 in MCX. Looking ahead, resistance levels are identified at $2,010 and support levels at $1,980 in Comex, while in MCX, support is noted at Rs 61,000 and resistance at Rs 62,000,” said Trivedi.
COMEX Silver prices surged more than 2% on Thursday, as mixed economic data from the US with a sharp plunge in retail sales weighed on dollar and treasury yields, improving the risk sentiments. An uptick in bullions and base metals aided the rally. Progress towards lower inflation has shaped the view that the Fed can cut interest rates from multiyear highs to avoid pushing the US into a recession. At the same time, economic outperformance in US gives the Fed to delay rate cuts, capping the gains.