Gold prices opened on the Multi Commodity Exchange (MCX) on Monday at Rs 62,327 per 10 grams and hit an intraday low of Rs 62,345. In the international market, prices hovered around $2,026.10 per troy ounce.
Meanwhile, silver opened at Rs 70,182 per kg and hit an intraday low of Rs 70,054 on the MCX. The price hovered around $22.76 per troy ounce in the international market.
Manav Modi, Analyst, Commodity and Currency, MOFSL, said, “Gold prices continue to inch lower after a brief recovery witnessed in the previous session on the back of firm Dollar, strong data points from the US and expectations of a delay in rate cuts.”
US Fed Governor Christopher Waller said the central bank was in no hurry to cut interest rates early, given that inflation remained sticky. His comments came after several other Fed officials offered similar signals last week, as did the Feds’ late-January meeting minutes.
Labour data showed weekly jobless claims unexpectedly fell, indicating continued resilience in the labour market, which also gives the Fed more impetus to keep rates higher.
Along with labour market data, preliminary manufacturing PMI and housing data from the US were better than expectations, weighing on gold and silver prices. There were updates regarding increased tensions in the Middle East, which could provide some support to metals on the lower end. This week’s focus will be on US GDP, CPI, consumer confidence, and other important data points. PCE price index is expected to see an uptick in January, which might be a headwind for gold prices.
Ravindra Rao, Head – Commodity Research at Kotak Securities, said, “COMEX Gold rose more than 1% during the previous week, tracking a decline in the greenback and US benchmark treasury yields on Friday amid uncertainty regarding the Fed policy outlook.”
“Minutes from the January FOMC meeting showed most officials remained more worried about the risk of cutting interest rates too soon than keeping them high for too long and damaging the economy, and the same tone was echoed in Fed speeches,” added Rao.
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Additionally, Jateen Trivedi, VP Research Analyst, LKP Securities, said, “Gold exhibited significant volatility throughout the last week, fluctuating between 62300 and 61875. This volatility was primarily driven by the release of CPI data, which exceeded expectations, and the delay in anticipated interest rate cuts by the US Federal Reserve. Inflation has remained stubbornly high, hovering around 3.1%, which has led to speculation that rate cuts may not materialise until June 2024.”
“Despite the challenges posed by elevated inflation and delayed rate cuts, the ongoing crisis in the Middle East provided some support to the overall outlook for Gold. Prices managed to hold above the $2000-$2015 mark, although they struggled to surpass the $2035 level in the spot market. Investors are closely monitoring these developments, as they continue to assess the impact of geopolitical tensions and macroeconomic factors on Gold prices,” said Trivedi.