Gold and silver prices today: Yellow metal hits a five-month low, slips 5% YTD. Should you invest now?
Analysts say with gold down 5 per cent YTD, it could be a good time to buy the dip
- Aug 18, 2023,
- Updated Aug 18, 2023 10:46 AM IST
Gold and silver prices have significantly dropped in recent weeks, reflecting the global market volatility and the strengthening of the US dollar.
Gold prices opened on the Multi Commodity Exchange (MCX) on Friday at Rs 58,393 per 10 grams and hit an intraday low of Rs 58,370. In the international market, prices hovered around $1,892.80 per troy ounce. Meanwhile, silver opened at Rs 70,440 per kg and hit an intraday low of Rs 70,362 on the MCX. The price hovered around $22.84 per troy ounce in the international market.
Based on strong US economic data, spot gold hit a five-month low of $1884 on Thursday. Gold is down 3.6 per cent in August alone and has fallen close to 5 per cent YTD.
Mohammed Imran, Research Analyst at Sharekhan by BNP Paribas, said, “The yellow metal is reeling under the surging U.S. treasury yields over interest rate hike expectations in the following FOMCs as the U.S. economy continues to remain resilient with strong consumer spending and tight labour market conditions, despite the interest rates remaining at 22-year high of 5.25 per cent.”
The US treasury yields, which usually have inverse relations to gold prices, are surging across the tenure; the 30-year treasury yields hit a 12-year high, and 10-year yields topped at 4.33 per cent on Thursday, adding pressure on non-yielding gold investments. In the same vein, silver’s performance has not been promising either.
“The weekly jobless claimants fell to 239K last week, and the forward-looking indicator of the Philadelphia Fed Manufacturing Index (Aug) came in at 12. The dollar index has drawn support from a recent run of U.S. economic data reinforcing the view that interest rates will remain high for some time, pushing the index to a fresh two-month high of 103.59 on Thursday, and we believe the dollar index will keep making gain in coming weeks on rate hike concerns,” said Imran.
Though global market volatility and a surging U.S. dollar have led to the depreciation of gold and silver prices, the long-term intrinsic worth of these metal investments remains untouched.
Anuj Gupta, Head of Commodity and Currency, HDFC Securities, said, “Technically, prices are on support levels, and we expect short covering after yesterday’s correction. Today, one can buy on dips around 58000-58100 levels with a stop loss of 57,700 and for the target of 58600 to 58700 levels.”
Many financial experts still consider the falling prices of gold and silver as an opportunity for investors. With gold prices at a five-month low and down 5 per cent YTD, it could be a conducive time for potential buyers to buy the dip.
Additionally, Amit Khare, Associate Vice President at GCL Broking, said, “October Gold closed at 58290 (-0.66 per cent) and September Silver closed at 70018 (0.40 per cent). Bullion's daily charts are trading near the oversold zone. Any time we can see short covering rallies in bullions. Momentum Indicator RSI also indicates the same. Traders are advised to make fresh buy positions in Gold and Silver near the given support level one with the stop loss of support level two and book near the given resistance levels: Gold October Support 58250/58000 and Resistance 58700/59000. Silver September Support 69700/69000 and Resistance 70500/71000.”
Manav Modi, Analyst, Commodity and Currency, MOFSL, said, “The Fed’s July meeting minutes showed that most rate-setting committee members supported higher interest rates to curb sticky inflation. Even though officials were divided over the need for more hikes amidst fears regarding slower global growth, they continued to show concerns about more upside risks to inflation. Interestingly, the CME Fed-Watch tool continues to show more than 85 per cent probability for a pause in the September meeting, keeping market participants on edge. On the data front, the number of Americans filing new claims for unemployment benefits fell last week, pointing to a still tight labour market. The US Philly manufacturing index was also reported better than expected, weighing on the safe-haven bets for gold. Focus today will be on EU CPI, UK retail sales data.”
Gold and silver prices have significantly dropped in recent weeks, reflecting the global market volatility and the strengthening of the US dollar.
Gold prices opened on the Multi Commodity Exchange (MCX) on Friday at Rs 58,393 per 10 grams and hit an intraday low of Rs 58,370. In the international market, prices hovered around $1,892.80 per troy ounce. Meanwhile, silver opened at Rs 70,440 per kg and hit an intraday low of Rs 70,362 on the MCX. The price hovered around $22.84 per troy ounce in the international market.
Based on strong US economic data, spot gold hit a five-month low of $1884 on Thursday. Gold is down 3.6 per cent in August alone and has fallen close to 5 per cent YTD.
Mohammed Imran, Research Analyst at Sharekhan by BNP Paribas, said, “The yellow metal is reeling under the surging U.S. treasury yields over interest rate hike expectations in the following FOMCs as the U.S. economy continues to remain resilient with strong consumer spending and tight labour market conditions, despite the interest rates remaining at 22-year high of 5.25 per cent.”
The US treasury yields, which usually have inverse relations to gold prices, are surging across the tenure; the 30-year treasury yields hit a 12-year high, and 10-year yields topped at 4.33 per cent on Thursday, adding pressure on non-yielding gold investments. In the same vein, silver’s performance has not been promising either.
“The weekly jobless claimants fell to 239K last week, and the forward-looking indicator of the Philadelphia Fed Manufacturing Index (Aug) came in at 12. The dollar index has drawn support from a recent run of U.S. economic data reinforcing the view that interest rates will remain high for some time, pushing the index to a fresh two-month high of 103.59 on Thursday, and we believe the dollar index will keep making gain in coming weeks on rate hike concerns,” said Imran.
Though global market volatility and a surging U.S. dollar have led to the depreciation of gold and silver prices, the long-term intrinsic worth of these metal investments remains untouched.
Anuj Gupta, Head of Commodity and Currency, HDFC Securities, said, “Technically, prices are on support levels, and we expect short covering after yesterday’s correction. Today, one can buy on dips around 58000-58100 levels with a stop loss of 57,700 and for the target of 58600 to 58700 levels.”
Many financial experts still consider the falling prices of gold and silver as an opportunity for investors. With gold prices at a five-month low and down 5 per cent YTD, it could be a conducive time for potential buyers to buy the dip.
Additionally, Amit Khare, Associate Vice President at GCL Broking, said, “October Gold closed at 58290 (-0.66 per cent) and September Silver closed at 70018 (0.40 per cent). Bullion's daily charts are trading near the oversold zone. Any time we can see short covering rallies in bullions. Momentum Indicator RSI also indicates the same. Traders are advised to make fresh buy positions in Gold and Silver near the given support level one with the stop loss of support level two and book near the given resistance levels: Gold October Support 58250/58000 and Resistance 58700/59000. Silver September Support 69700/69000 and Resistance 70500/71000.”
Manav Modi, Analyst, Commodity and Currency, MOFSL, said, “The Fed’s July meeting minutes showed that most rate-setting committee members supported higher interest rates to curb sticky inflation. Even though officials were divided over the need for more hikes amidst fears regarding slower global growth, they continued to show concerns about more upside risks to inflation. Interestingly, the CME Fed-Watch tool continues to show more than 85 per cent probability for a pause in the September meeting, keeping market participants on edge. On the data front, the number of Americans filing new claims for unemployment benefits fell last week, pointing to a still tight labour market. The US Philly manufacturing index was also reported better than expected, weighing on the safe-haven bets for gold. Focus today will be on EU CPI, UK retail sales data.”