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July 18, 2024
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Gold and silver prices today: Yellow metal falls over 1% in first decline after a nine-day surge

Gold prices opened on the Multi Commodity Exchange (MCX) on Wednesday at Rs 65,520 per 10 grams and hit an intraday low of Rs 65,450. In the international market, prices hovered around $2,159.19 per ounce.

Meanwhile, silver opened at Rs 73,810 per kg and hit an intraday low of Rs 73,700 on the MCX. In the international market, the price hovered around $24.09 per ounce.

Anuj Gupta, Chief of Commodity and Currency at HDFC Securities, said, “Yesterday gold prices corrected by 0.84% and closed at 64481 levels. Recently Gold made a new high of 66356 levels. Silver prices corrected by 0.89% and closed at 73850 levels.”

Gold prices were hit chiefly by fears of higher-for-longer US interest rates after consumer price index inflation was higher than expected in February. The dollar and Treasury yields rose after Tuesday’s data, pressuring bullion prices.

Manav Modi, Analyst, Commodity and Currency, MOFSL, said, “Gold price fell for the first time in nine days after a hot US inflation report dimmed prospects of the Federal Reserve cutting interest rates soon.”

US consumer prices gained in February, suggesting some stickiness in inflation. Data showed that the Consumer Price Index (CPI) rose 0.4% monthly in February and increased by 3.2% annually, above the 3.1% forecast.

“Focus will now shift to next week’s Fed meeting, where we will receive an updated dot plot. According to the CME Fed-Watch tool, the market is still pricing at around 70% chance of a U.S. rate cut by June,” said Modi.

A slew of Fed officials mentioned in their comments in the previous few weeks that the timing and scale of any rate cuts this year will be closely tied to the path of inflation. Post the US inflation data, the dollar steadied from recent losses, also weighing on metal prices. No major data points are scheduled from the US today. However, market participants will keep an eye on UK GDP and EU IIP data.

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Sachin Kothari, Director at Augmont, said, “Chinese investors are hedging against potential economic instability amid the commercial real estate crisis in their country. Moreover, lower growth concerns in other economies around the world are also supporting the prices. There are several other reasons why gold prices have increased in the United States. Some investors are trying to hedge against the possibility of higher-than-expected inflation, realign their portfolios after the stock market boom, and protect themselves from geopolitical instability.”

Investors are concerned about wars between Russia and Ukraine, Israel and Hamas, and the upcoming presidential election in November.

Ravindra Rao, Head Commodity Research, Kotak Securities, said, “COMEX Gold prices declined more than 1% on Tuesday as hotter than expected US inflation reinforced Fed’s cautious approach to cutting interest rates.”

Amit Khare, Associate Vice President at GCL Broking, says, “April gold closed at 65481(-0.90%), and May silver closed at 73850(-0.90%). As per the daily chart, bulls are now trading at the overbought zone; any time we can see profit booking in gold and silver, below are the important levels for the day: Gold April Support 65400/65200 and Resistance 65600/65800. Silver May Support 73500/73000 and Resistance 74300/75000.”

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