On Monday, the gold and silver rates fell in Indian markets following a weak trend in global markets. The gold futures fell to Rs.50,622 per 10 gram on MCX while silver fell 0.5% to Rs.54,865 per kg. In global markets, gold was holding steady at USD 1,725.17 per ounce, supported by a lower treasury yield and a slight pullback in the US dollar.
The traders have been focusing on the US Federal Reserve’s two-day policy meeting, which ends on Wednesday. The market observers are expecting a 75 bps rate hike. Among the other precious metals, platinum eased 0.2% to USD 871.43, spot silver was steady at USD 18.58 per ounce, and palladium slipped 1.5% to USD 2,001.62.
Gold has corrected by more than USD 250, or 12%, after rising above the USD 2,000 per ounce level in early March amid a strong dollar and rate hike by Fed due to the Ukraine war. In Indian markets, gold had hit Rs.55,200 in mid-March before yielding to selling pressure.
The European Central Bank increased the interest rates by 50 bps last week to combat soaring inflation. The rising interest rates boost the opportunity cost of holding bullion, though gold is seen as a hedge against inflation.
Rahul Kalantri, VP Commodities of Mehta Equities Limited, stated that gold has support at USD 1712-1700 and resistance are at USD 1738-1747. Silver has support at USD 18.42-18.30, and resistance is at USD 18.95-19.15. In rupee terms, gold has support at Rs.50,540-49,310 and resistance is at Rs.50,860-50,990. Silver has support at Rs.54,650-54,210 and resistance is at Rs.55,580–56,110.
Ravindra Rao, VP-Head Commodity Research, Kotak Securities, stated that the COMEX gold rates trade lower near USD 1724 per ounce since bond yields and the US dollar index paused after a recent correction. The market players are positioning for the Fed decision on Wednesday. Their expectations of a 75 bps rate hike have been factoring in, and they want clarity if the Fed may slow the rate hikes going ahead to address the economic challenges.
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