Gold rates slip ahead of US inflation data; how to trade in gold today?
Gold prices traded lower in the morning session in the domestic futures market on Wednesday, mirroring the subdued trends observed in the global market as investors await US inflation data, expected later today, which could influence expectations around the interest rate trajectory in the US.
“While the Fed is expected to leave interest rates unchanged at its September 19-20 policy meeting, the US central bank will probably wait until the April-June period of 2024 or later before cutting it,” Reuters reported quoting a poll of economists.
MCX Gold for October 5 contract traded 0.09 per cent lower at ₹58576 per 10 grams around 10:25 am.
As there are strong expectations that the Fed will not hike rates from here on, market participants appear bullish on gold for the long term.
When interest rates go up, holding gold becomes less attractive because it doesn’t generate significant income, and this makes people less interested in owning it. In case of rate cuts, gold becomes attractive for investing.
What should be your strategy for gold today?
Manoj Kumar Jain of Prithvifinmart Commodity Research expects gold and silver to remain volatile in today’s session ahead of the US inflation data and ECB (European Central Bank) monetary policy meetings.
He expects gold to hold $1,922 per troy ounce level while silver could hold $22.50 per troy ounce levels this week on a closing basis.
“Gold has support at $1,922-1,910, while resistance at $1,944-1,956 per troy ounce. Silver has support at $23.15-22.88, while resistance is at $23.64-23.92 per troy ounce. On the MCX, gold has support at ₹58,500-58,380 and resistance is at ₹58,750-58,920 while silver has support at ₹71,550-71,100 and resistance is at ₹72,330-72,750,” said Jain.
Jain suggests staying away from gold and silver in today’s session ahead of the US inflation data.
Rahul Kalantri, VP of commodities at Mehta Equities expects gold and silver to remain volatile in today’s session ahead of the US inflation data and ECB monetary policy meetings.
“Gold has support at $1,900-1,888 while resistance is at $1,924-1,936. Silver has support at $22.72-22.58, while resistance is at $23.22-23.40. In the Indian rupee terms, gold has support at ₹58,480, and ₹58,240 while resistance is at ₹58,920, and ₹59,170. Silver has support at ₹71,350-70,650, while resistance is at ₹72,540–72,950,” said Kalantri.
Brokerage firm ICICI Direct believes spot gold may slip further towards the $1,900 level as long as it sustains below the $1,920 level amid a rise in US treasury yields.
The brokerage firm said MCX Gold prices may move south towards ₹58,300 level as long as it trades below the resistance level of ₹58,900 levels. MCX Silver is expected to slip further towards the ₹71,300 level as long as it sustains below ₹72,500 level, said the brokerage firm.
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Disclaimer: The views and recommendations above are those of individual analysts, experts and broking companies, not of Mint. We advise investors to check with certified experts before making any investment decisions.
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Updated: 13 Sep 2023, 10:44 AM IST
