Gold prices opened on the MCX on Friday at Rs 61,925 per 10 grams and hit an intraday low of Rs 61,925. In the international market, prices hovered around $2,034.89 per troy ounce. Meanwhile, silver opened at Rs 71,861 per kg and hit an intraday low of Rs 71,751 on the MCX. The price hovered around $22.89 per troy ounce in the international market.
Manav Modi, Analyst, Commodity and Currency, MOFSL, said, “Gold eased in yesterday’s session to a one-month low as the dollar ticked higher after hotter-than-expected inflation data, while hawkish remarks from Federal Reserve officials fuelled worries that higher interest rates could stay unchanged beyond March.”
The dollar index extended gains after data showed that consumer prices in the US rose more than expected in December, which could delay a much anticipated US rate cut in March. Cleveland Fed President Loretta Mester said it would likely be too soon for the central bank to cut its policy rate in March, while Richmond Fed chief Tom Barkin said gains on inflation have been too narrowly focused on goods.
However, today, in the early morning trade, things reversed as the geopolitical uncertainty increased once again with the US and UK launching strikes against Houthi rebels in Yemen, raising the risk premium for bullions.
Modi said, “Houthi group-led trouble has been providing volatility in the crude prices till now; however, with the interference of countries like the US and the UK, the distress in the market has increased. The probability chart for the March fed meeting has not budged much.”
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However, volatility could increase with market participants keeping an eye on rate cut expectations and geopolitical uncertainties. Today, the focus will also be on UK GDP, India CPI, and US PPI data.
Associate Vice President at GCL Broking says, “February gold closed at 61788(-0.32%), and March silver closed at 71354(-0.82%). As per the daily chart, Bullions are now trading near the demand zone. Any time we can see a good recovery from the support zone, the Momentum Indicator RSI also indicates the same, So traders are advised to make fresh buy positions in Gold and Silver near the given support level one with the stop loss of support level two and book near given resistance levels: Gold February Support 61750/61500 and Resistance 62300/62500. Silver March Support 71300/71000 and Resistance 72500/73000.”