Gold and silver price witness sharp recovery after Fed meeting, 25 bps ECB rate hike

Gold prices on the Multi Commodity Exchange (MCX) opened on Friday at Rs 59,340 per 10 grams and hit an intraday low of Rs 59,330. In the international market, prices hovered around $1,956.25 per troy ounce. Meanwhile, silver opened on Friday at Rs 72,323 per kg and hit an intraday low of Rs 71,285 on the MCX. The price hovered around $23.89 per troy ounce in the international market.

Anuj Gupta, Vice President of IIFL Securities, said, “Yesterday gold prices closed with on note at Rs 59,355 levels. In the international market, it is trading at $1,958 levels per ounce. The pause in interest rates hikes by the US Federal Reserve and, on another hand, interest rate hikes by the ECB are supportive of gold. We noticed a sudden fall in the dollar index due to strength in major currencies. This will provide support to the gold.”

He sees technically strong support at Rs 59,000 levels and then 58700 levels, Resistance at 59500 and then 59900 levels. One can buy around Rs 58,900-59,000 levels with a stop-loss of Rs 58,700 and for the target of Rs 59,500 to Rs 59,600 levels. Gold may test $1,970 levels in international markets.

Gold and silver prices sharply recovered after slipping in the earlier session following the Fed policy meeting. It has been a volatile week; market participants were cautiously awaiting the Fed policy meeting post the US inflation data.

Manav Modi, Analyst, Commodities and Currencies, Motilal Oswal Financial Services Ltd. (MOFSL), said, “US central bank kept their rate unchanged, but raised expectations for two more rate hikes this year, they also increased the GDP forecast and mentioned about the Inflationary concerns still existing in the market. Expectations for further rate hikes supported the move in US Yields, weighing on bullions. In the second half of yesterday's session, US Retail sales were surprisingly reported higher; however, industrial production and weak jobless claims led to a sharp recovery for both metals. European Central Bank (ECB) announced a rate hike of 25bps and raised its interest rate to the highest level since 2001, which weighed on the dollar index. Focus today will be on EU CPI, Michigan consumer sentiment and comments from a few fed officials.”