Gold price steady after Fed rate cut, rebound from lows to open at Rs 1,09,365/10 g. Check key levels to watch
This is opposed to the international market, where gold prices traded flat on Friday as the Federal Reserve‘s 25-basis-point rate cut and the outlook on further easing in the months ahead failed to meet the investors’ dovish expectations, while markets awaited more cues into U.S. policy path.
Spot gold was little changed at $3,646.23 per ounce as of 0311 GMT.
The Fed resumed rate cuts on Wednesday and opened the door to further easing, but tempered its message with warnings of sticky inflation, sowing doubt over the pace of future easing.
Fed Chair Jerome Powell characterised the policy action as a risk-management cut in response to the weakening labour market and said the central bank was in a “meeting-by-meeting situation” regarding the rate outlook.
Traders are pricing in a 92% chance of another 25-basis-points cut at the Fed’s October meeting, per the CME Group‘s FedWatch tool.Lower rates reduce the opportunity cost of holding non-yielding bullion.On Thursday, gold and silver settled on a mixed note in the domestic market and on a slightly weaker note in the international markets. Gold October futures contract settled at Rs1,09,052 per 10 grams with a loss of 0.70% while silver December futures contract settled at Rs1,27,132 per kilogram with a gain of 0.12%.
Gold and silver extended their fall in the international markets amid profit-taking after a strong rebound in the dollar index from the February 2022 low. The U.S. 10-year bond yields also sharply rebounded and crossed the 4.10% level once again.
Today, the US Dollar Index, DXY, was hovering near the 97.42 mark, gaining 0.07 or 0.07%.
Further, the Bank of England kept its policy rates unchanged on Thursday in its policy meeting at 4.0% and also limited gains of gold and silver.
“The global equity markets gained after Fed rate cuts and eased safe-haven buying for precious metals. However, geopolitical tensions and central banks’ buying could support gold and silver prices at lower levels,” said Manoj Kumar Jain of Prithvifinmart Commodity Research.
“We expect gold and silver prices to remain volatile in today’s session amid volatility in the dollar index and volatility in the global financial markets and gold are expected to trade in the range of $3,634-3,720 per troy ounce and silver is expected to trade in the range of $41.20-42.70 per troy in today’s session,” he added.
How to trade gold?
Manoj Kumar Jain suggested the following ranges for gold and silver on MCX:
- Gold has support at Rs 1,08,650-1,08,200 and resistance at Rs 1,09,400-1,09,850
- Silver has support at Rs 1,26,200-1,254,00 and resistance at Rs 1,28,000-1,28,850
Jain suggests selling silver around Rs 1,27,500 with stop loss of Rs 1,28,200 for a target of Rs 1,26,000.
Gold rates in physical markets
Gold Price today in Delhi
Standard gold (22 carat) prices in Delhi stand at Rs 58,088/8 grams while pure gold (24 carat) prices stand at Rs 62,008/8 grams.
Gold Price today in Mumbai
Standard gold (22 carat) prices in Mumbai stand at Rs 57,744/8 grams while pure gold (24 carat) prices stand at Rs 61,520/8 grams.
Gold Price today in Chennai
Standard gold (22 carat) prices in Chennai stand at Rs 56,752/8 grams while pure gold (24 carat) prices stand at Rs 60,448/8 grams.
Gold Price today in Hyderabad
Standard gold (22 carat) prices in Hyderabad stand at Rs 56,920/8 grams while pure gold (24 carat) prices stand at Rs 60,624/8 grams.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)