Gold and silver prices today: Yellow metal prices drop to 1-month low
Bets for a pause in the March meeting of the US Fed are increasing significantly, say analysts
- Jan 18, 2024,
- Updated Jan 18, 2024 12:42 PM IST
Gold prices opened on the Multi Commodity Exchange (MCX) on Thursday at Rs 61539 per 10 grams and hit an intraday low of Rs 61,482. In the international market, prices hovered around $2,008.34 per troy ounce. Meanwhile, silver opened at Rs 71,440 per kg and hit an intraday low of Rs 71,320 on the MCX. The price hovered around $22.57 per troy ounce in the international market.
Manav Modi, Analyst, Commodity and Currency, MOFSL, said, “Gold price fell to a more than one-month low as strong economic data strengthened dollar and Treasury yields and lowered market expectations of a US rate cut in March.”
The metal was down by more than 1% in the previous session in its biggest single-day decline since Dec. 4, 2023. The U.S. dollar hovered at a one-month high following robust retail sales data, while yields on the benchmark U.S. 10-year Treasury notes also gained.
The dollar index and treasury yields acted as a catalyst for gold prices’ underperformance, which rallied higher after the better-than-expected retail sales data print from the US. The data indicated that the US economy is still running hot despite sky-high interest rates, reducing bets for rapid interest rate cuts by the Federal Reserve.
“Treasury yields also rose following the data, with the US two-year note last seen paying 4.359%, up 13.5 basis points, while the yield on the 10-year note was up 4.2 basis points to 4.109%. We expect the Gold price to trade with a negative bias as long as the $2050 level is intact on the upside,” said Deveya Gaglani, Research Analyst - Commodities, Axis Securities.
On the data front, US retail sales increased more than expected in December, keeping the economy on solid ground heading into the New Year. US industrial production was also reported to be better than expectations weighing on safe-haven assets. Fed official Waller stated earlier this week that the central bank should not rush to cut rates until lower inflation can be sustained.
Modi said, “Bets for a pause in the March Fed meeting are increasing significantly as opposed to the expectations of a rate cut that the market was expecting till now after positive economic data and Fed officials’ comments. Focus today will be on Philly fed manufacturing index and US weekly jobless claims data.”
Also read: Here’s how you can buy health insurance for your parents and claim tax-saving benefits at work
Also read: Budget 2024-25: Here is what experts expect for the real estate sector
Gaglani says, "Gold prices have been under selling pressure for the past weeks. Gold prices have corrected almost 3 per cent after they failed to sustain near the recent swing high, i.e. 63600. Gold has broken the strong support zone of the 61800 level in the domestic market, which is a bearish sign for prices. Sell on Rise is recommended in Gold as long as the 62000 level is protected on the upside."
Additionally, Amit Khare, Associate Vice President at GCL Broking, said, “MCX gold and silver gave negative closing yesterday. As per the daily chart, bullions are trading near an important support zone; below are the important levels for the day: Gold February Support 61400/61200 and Resistance 61800/62000. Silver March Support 71300/70700 and Resistance 72000/72500.”
Gold prices opened on the Multi Commodity Exchange (MCX) on Thursday at Rs 61539 per 10 grams and hit an intraday low of Rs 61,482. In the international market, prices hovered around $2,008.34 per troy ounce. Meanwhile, silver opened at Rs 71,440 per kg and hit an intraday low of Rs 71,320 on the MCX. The price hovered around $22.57 per troy ounce in the international market.
Manav Modi, Analyst, Commodity and Currency, MOFSL, said, “Gold price fell to a more than one-month low as strong economic data strengthened dollar and Treasury yields and lowered market expectations of a US rate cut in March.”
The metal was down by more than 1% in the previous session in its biggest single-day decline since Dec. 4, 2023. The U.S. dollar hovered at a one-month high following robust retail sales data, while yields on the benchmark U.S. 10-year Treasury notes also gained.
The dollar index and treasury yields acted as a catalyst for gold prices’ underperformance, which rallied higher after the better-than-expected retail sales data print from the US. The data indicated that the US economy is still running hot despite sky-high interest rates, reducing bets for rapid interest rate cuts by the Federal Reserve.
“Treasury yields also rose following the data, with the US two-year note last seen paying 4.359%, up 13.5 basis points, while the yield on the 10-year note was up 4.2 basis points to 4.109%. We expect the Gold price to trade with a negative bias as long as the $2050 level is intact on the upside,” said Deveya Gaglani, Research Analyst - Commodities, Axis Securities.
On the data front, US retail sales increased more than expected in December, keeping the economy on solid ground heading into the New Year. US industrial production was also reported to be better than expectations weighing on safe-haven assets. Fed official Waller stated earlier this week that the central bank should not rush to cut rates until lower inflation can be sustained.
Modi said, “Bets for a pause in the March Fed meeting are increasing significantly as opposed to the expectations of a rate cut that the market was expecting till now after positive economic data and Fed officials’ comments. Focus today will be on Philly fed manufacturing index and US weekly jobless claims data.”
Also read: Here’s how you can buy health insurance for your parents and claim tax-saving benefits at work
Also read: Budget 2024-25: Here is what experts expect for the real estate sector
Gaglani says, "Gold prices have been under selling pressure for the past weeks. Gold prices have corrected almost 3 per cent after they failed to sustain near the recent swing high, i.e. 63600. Gold has broken the strong support zone of the 61800 level in the domestic market, which is a bearish sign for prices. Sell on Rise is recommended in Gold as long as the 62000 level is protected on the upside."
Additionally, Amit Khare, Associate Vice President at GCL Broking, said, “MCX gold and silver gave negative closing yesterday. As per the daily chart, bullions are trading near an important support zone; below are the important levels for the day: Gold February Support 61400/61200 and Resistance 61800/62000. Silver March Support 71300/70700 and Resistance 72000/72500.”