Gold and silver prices today: Yellow metal inches up slightly amid expectations of Fed rate hike

Gold prices opened on the Multi Commodity Exchange (MCX) on Tuesday at Rs 59,214 per 10 grams and hit an intraday low of Rs 59,199. In the international market, prices hovered around $1,964.93 per troy ounce. Meanwhile, silver opened at Rs 74,600 per kg and hit an intraday low of Rs 74,510 on the MCX. The price hovered around $24.69 per troy ounce in the international market.

Anuj Gupta, Vice President of IIFL Securities, said, "Yesterday, gold prices closed at 59158 levels on a flat note, up by 0.14%. The dollar is strengthening due to weakness in other currencies. However, the rupee is appreciating against the dollar. We saw a correction in Euro and Pound against the dollar. The market is awaiting fresh cues from FOMC's decision on interest rates today. Expectation on flat to lower interest rates by the FOMC. In the international market, gold trades at $1964 per ounce."

He sees technically strong support at 58800 levels and then 58650 levels, Resistance at 59500 and then 59800 levels. Today, one can buy on the rise around 58900-59000 levels with a   stop-loss of 58650 and for the target of 59500 to 59600 levels. Gold may test $1970 to $1975 levels in international markets."

Gold price inched slightly higher, awaiting further direction ahead of the U.S. Federal Reserve's widely expected rate hike and a possible indication of an end to its monetary tightening cycle.

Manav Modi, Analyst, Commodity and Currency, MOFSL, said, "The Dollar and U.S. Treasury yields held near their two-week highs, hovering above 101 and 3.8% mark respectively. U.S. economic data remain mixed, keeping the market participants on edge. The U.S. consumer confidence increased to a two-year high in July, reported at 117 against the expectations of 111.8. However, the market remained fearful of a recession over the next year following high interest rates."

Today, the U.S. Commerce Department is expected to report that new home sales likely fell to a seasonally adjusted annual rate of 725,000 units in June from 763,000 units the month before.

"Market focus is also on a series of central bank meetings this week, starting from the Fed policy decision scheduled today, followed by the ECB on Thursday and the BOJ a day later. According to the CME Fed-Watch tool, the probability of the July and September meeting continue to show a higher probability of a 25bps rate hike. However, watching Governor Powell's speech and stance on inflation, growth, and further monetary policy tightening will be important. This week US GDP and U.S. Core PCE also remain important to watch for," said Modi.

At the end of a two-day meeting on Wednesday, it is widely anticipated that the FED will increase interest rates by 25 basis points, says Prithviraj Kothari, MD CEO of RiddiSiddhi Bullions Limited. "Markets appear to have largely factored in the rise, but traders are still unsure of what the FED will signal regarding the next policy. The likelihood that the bank will maintain rates at current levels for the remainder of the year is priced into the market, according to FED Fund futures prices, which is good news for the yellow metal. Gold prices need to sustain above Rs 60000 to continue their bull run towards a new high," Kothari added.

Amit Khare, Associate Vice President at Ganganagar Commodity Limited (GCL), said, "August Gold closed at 59189(0.15%). September Silver closed at 74773(0.91%), Bullion's daily charts are showing profit booking, and Momentum Indicator RSI also indicates the same, So traders are advised to book profit in longs and can create fresh short positions in Gold and Silver near given residence level one with the stop loss of resistance level two and book near given support levels: Gold August Support 58950/58800 and Resistance 59300/59600. Silver September Support 74000/73200 and Resistance 74800/75400."