Gold and silver prices today: Yellow metal at risk on potential US Fed rate hike
With the anticipation of a rate hike by the US Federal Reserve, gold faces a considerable threat of further decline
- Sep 7, 2023,
- Updated Sep 7, 2023 11:23 AM IST
Gold prices opened on the Multi Commodity Exchange (MCX) on Thursday at Rs 59,043 per 10 grams and hit an intraday low of Rs 59,017. In the international market, prices hovered around $1,918.65 per troy ounce. Meanwhile, silver opened at Rs 72,265 per kg and hit an intraday low of Rs 72,191 on the MCX. The price hovered around $23.713 per troy ounce in the international market.
Spot gold fell 0.40% to close at $1918.17 as hotter-than-expected US ISM services data (August) led to renewed rate hike concerns.
Praveen Singh – Associate VP, Fundamental Currencies and Commodities, Sharekhan by BNP Paribas, said, "US ISM services Index for August was reported to be 54.50, which was much better than the estimate of 52.50. The data also showed a significant improvement from the July reading, which was 52.70. ISM services price paid jumped from 56.80 in July to 58.90 in August, which stokes inflation concerns."
New service orders improved to 57.50 from 55 in July. US yields rose once again, thus boosting the US Dollar Index, and pressuring the commodities. Although ISM services data may not show the same strength going forward as the data got solid support from the entertainment industry that also supported affiliated industries, too, for now, it is expected to keep both yields and Dollar firm.
"Two-year US yields closed 1.39% to close the day at 5.029%, while the ten-year yields at 4.29% were up nearly 0.60%. The US Dollar Index was up 0.08% as it approached the key psychological resistance at 105. Bank of Canada kept the benchmark rate on hold with a hawkish bias. Germany's factory orders fell 11.70% m-o-m in July; however, July retail sales of the Euro-zone shrank 1% y-o-y as against the forecast of a decline by 1.20%," said Singh.
China's trade balance data (August) released this morning were slightly better than the forecast. Today's US data include initial jobless claims (September 2), continuing claims (August 26) and unit labour costs (2Q final reading). Euro-zones 2Q final GDP reading will also be on investors' radar.
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Gold is in danger of falling further on the increased probability of a rate hike by the US Federal Reserve later this year. Slower corporate bond issuance may temper yields, which may support the yellow metal," said Singh.
Yesterday, gold prices closed with a fall of 0.26% at 59088 levels on the back of strength in the dollar index. The dollar index is now trading above 104.80 levels on the expectation of a hike in interest rates by the US Federal Bank.
Amit Khare, Associate Vice President at GCL Broking, said, "October Gold closed at 59088(-0.25%) and December Silver closed at 72472(-1.33%). Bullions daily charts look weak, and Momentum Indicator RSI also indicates the same. Traders are advised to make fresh short positions in Gold and Silver near given resistance level one with the stop loss of resistance level two and book near the given support levels: Gold October Support 59000/58800 and Resistance 59300/59600. Silver December Support 72000/71500 and Resistance 72800/73600."
Adding to it, Anuj Gupta, Head of Commodity and Currency at HDFC Securities, said, "Positive US economic data Trade Balance and Final service PMI data putting pressure on gold and provide support to the dollar. Today, traders can sell gold on a rise of around 59300 with a stop-loss of 59575 levels for the target of 58900 levels. Internationally, gold may trade between $1910 to $1925 levels."
Gold prices opened on the Multi Commodity Exchange (MCX) on Thursday at Rs 59,043 per 10 grams and hit an intraday low of Rs 59,017. In the international market, prices hovered around $1,918.65 per troy ounce. Meanwhile, silver opened at Rs 72,265 per kg and hit an intraday low of Rs 72,191 on the MCX. The price hovered around $23.713 per troy ounce in the international market.
Spot gold fell 0.40% to close at $1918.17 as hotter-than-expected US ISM services data (August) led to renewed rate hike concerns.
Praveen Singh – Associate VP, Fundamental Currencies and Commodities, Sharekhan by BNP Paribas, said, "US ISM services Index for August was reported to be 54.50, which was much better than the estimate of 52.50. The data also showed a significant improvement from the July reading, which was 52.70. ISM services price paid jumped from 56.80 in July to 58.90 in August, which stokes inflation concerns."
New service orders improved to 57.50 from 55 in July. US yields rose once again, thus boosting the US Dollar Index, and pressuring the commodities. Although ISM services data may not show the same strength going forward as the data got solid support from the entertainment industry that also supported affiliated industries, too, for now, it is expected to keep both yields and Dollar firm.
"Two-year US yields closed 1.39% to close the day at 5.029%, while the ten-year yields at 4.29% were up nearly 0.60%. The US Dollar Index was up 0.08% as it approached the key psychological resistance at 105. Bank of Canada kept the benchmark rate on hold with a hawkish bias. Germany's factory orders fell 11.70% m-o-m in July; however, July retail sales of the Euro-zone shrank 1% y-o-y as against the forecast of a decline by 1.20%," said Singh.
China's trade balance data (August) released this morning were slightly better than the forecast. Today's US data include initial jobless claims (September 2), continuing claims (August 26) and unit labour costs (2Q final reading). Euro-zones 2Q final GDP reading will also be on investors' radar.
Also read: 80% of foreign tourists state QR-powered UPI influences their travel experiences: Survey
Also read: I’m 35 and earn Rs 2 lakh a month. How much and in which mutual fund schemes should I invest?
Gold is in danger of falling further on the increased probability of a rate hike by the US Federal Reserve later this year. Slower corporate bond issuance may temper yields, which may support the yellow metal," said Singh.
Yesterday, gold prices closed with a fall of 0.26% at 59088 levels on the back of strength in the dollar index. The dollar index is now trading above 104.80 levels on the expectation of a hike in interest rates by the US Federal Bank.
Amit Khare, Associate Vice President at GCL Broking, said, "October Gold closed at 59088(-0.25%) and December Silver closed at 72472(-1.33%). Bullions daily charts look weak, and Momentum Indicator RSI also indicates the same. Traders are advised to make fresh short positions in Gold and Silver near given resistance level one with the stop loss of resistance level two and book near the given support levels: Gold October Support 59000/58800 and Resistance 59300/59600. Silver December Support 72000/71500 and Resistance 72800/73600."
Adding to it, Anuj Gupta, Head of Commodity and Currency at HDFC Securities, said, "Positive US economic data Trade Balance and Final service PMI data putting pressure on gold and provide support to the dollar. Today, traders can sell gold on a rise of around 59300 with a stop-loss of 59575 levels for the target of 58900 levels. Internationally, gold may trade between $1910 to $1925 levels."