Gold Rate Today: Yellow metal rises amid weak US dollar and bond yields

Gold prices gained on Tuesday as the US dollar and bond yields weakened on growing prospects for interest rate cuts by the Federal Reserve as early as March next year.

The February gold futures were trading at Rs 63,164 per 10 grams on the MCX at 10.15 am and were up by Rs 210 or 0.33% from the previous day’s closing price. Meanwhile, the March Silver futures were trading at Rs 75,640 per kg and were higher by Rs 254 or 0.34% around this time.

On Comex, the gold futures were trading at $2,075.3 per troy ounce up $6.2 or 0.30% while the Silver futures were trading at $24.66 per troy ounce, up by $0.095 or 0.39%.

“We have noticed that the dollar index is trading at 5-month low levels which gives support to the Bullion as a safe haven,” said Anuj Gupta, Head of Commodities & Currency at HDFC Securities.

The Dollar Index is trading at 5-month low levels after the Federal Reserve kept interest rates steady for and signalled deeper cuts for next year as inflation is expected to cool faster than initially anticipated.

“For the trading, gold may trade between $1960 to $1975 levels with a positive bias and on MCX it may trade between 62800 to 63500 levels. Silver may trade between 75000 to 77000 levels. Overall Trend is positive. Buy on dips is recommending,” Gupta said.
Gold prices surged during the week on the prospect of a Federal Reserve interest rate cut in March, backed by a 4.9% GDP growth rate and increased jobless claims.The market now predicts an 83% chance of a rate cut, strengthening gold’s appeal as a non-yielding asset. Despite a dovish Fed stance.

Gold’s gains are intricately linked to evolving US monetary policy, reflecting the delicate balance between economic data, interest rates, and the allure of non-interest-bearing assets.

“We expect gold to trade higher towards 63300 levels, a break of which could prompt the price to move higher towards 63590 levels,” Saish Sandeep Sawant Dessai, Analyst at Angel One, said.

The dollar index fell 0.1%, making gold more attractive for other currency holders, while the benchmark U.S. 10-year bond yield edged lower to 3.8838%.

“Gold and silver exhibited significant price volatility, settling on a mixed note amidst positive U.S. durable goods orders and core durable goods orders data. The dollar index slipped below the 102 marks, trading at 4-month lows, and U.S. 10-year bond yields are maintaining levels below 4.0%, providing support to precious metals,” said Rahul Kalantri, VP Commodities at Mehta Equities.

“Ongoing geopolitical tensions and weakness in the dollar index may persist, continuing to bolster gold and silver prices in the upcoming sessions. Anticipating low liquidity, we expect gold and silver prices to remain volatile in today’s session,” he said.

Gold finds support at Rs 62,790-61,620, with resistance at Rs 63,140 and Rs 63,310. Silver’s support is at Rs 74,950-74,280, with resistance at Rs 75,950 and Rs 76,580, the analyst said.

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(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)