Gold and silver prices today: Yellow metal languishes in early trade as dollar strengthens

Gold prices opened on the Multi Commodity Exchange (MCX) on Wednesday at Rs 62,054 per 10 grams and hit an intraday low of Rs 61,814. In the international market, prices hovered around $2,020.99 per troy ounce. Meanwhile, silver opened at Rs 73,086 per kg and hit an intraday low of Rs 72,800 on the MCX. The price hovered around $22.71 per troy ounce in the international market.

Manav Modi, Analyst, Commodity and Currency, MOFSL, said, “Gold price languished in the early morning trade pressured by a firmer dollar and higher U.S. Treasury yields after hawkish remarks from Federal Reserve Governor Christopher Waller’s comments on interest rate cuts this year, but safe-haven buying limited bullion’s downside.”

The dollar index rose nearly 1% to a more than one-month high, while yields on the benchmark U.S. 10-year Treasury notes also gained, hovering around the 4% mark.  "We have noticed that the dollar index recovered from lower levels and is trading at 1 month-high levels after FOMC member stated that the time is yet not confirmed when interest rates will start to be cut. Wedding season demands witnessing in the physical market," said Anuj Gupta, Chief of Commodity and Currency at HDFC Securities.

Fed official Waller said the United States was "within striking distance" of the Fed's 2% inflation goal, but the central bank should not rush towards cuts in its benchmark interest rate until it is clear lower inflation will be sustained.

The Fed bank is widely expected to hold its policy rate steady at the end of its Jan. 30-31 meeting. "Traders see a 67% probability of an interest rate cut in March, according to the CME Fedwatch tool. On the other hand, the US is preparing to name the Houthis, an Iran-backed militant group in Yemen, as a specially designated global terrorist group," said Modi.

It is also reported that US forces carried out fresh strikes on targets linked with Houthi militants in Yemen amid disruption to global trade caused by cargo ships diverting to avoid the Iran-backed group’s attacks in the Red Sea.

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“Updates regarding rate cut expectations and geo-political tension will be important to watch. Focus today will be on EU & UK CPI, Retail Sales and IIP from the US," added Modi.

Amit Khare, Associate Vice President at GCL Broking, says, "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 February Support 62000/61800 and Resistance 62300/62500. Silver March Support 71700/71000 and Resistance 72500/73000."