Gold and silver prices today: Yellow metal recovers amid market reassessment of Fed rate cut, silver correct by 0.52%

Gold prices opened on the Multi Commodity Exchange (MCX) on Wednesday at Rs 62,230 per 10 grams and hit an intraday low of Rs 62,134. In the international market, prices hovered around $2,026.50 per troy ounce. Meanwhile, silver opened at Rs 72,204 per kg and hit an intraday low of Rs 71,911 on the MCX. The price hovered around $22.89 per troy ounce in the international market.

Manav Modi, Analyst, Commodity and Currency, MOFSL, said, “Gold prices rose slightly, recovering from a rough start to the year, as markets reassessed expectations for early interest rate cuts by the Federal Reserve before key US inflation data due this week.”

Some relief this week was seen after a sharp fall in the first week of the New Year, as the dollar fell from three-week highs amid some profit-taking. Market participants will keep an eye on the inflation data from the US later this week. The reading is expected to show a mild pick-up in inflation in December, which, coupled with the strong non-farm payrolls data, gives the Fed more headroom to keep rates higher for longer. This has forced some trimming in expectations for early interest rate cuts, which in turn saw gold give up some gains made in December.

“Atlanta Fed President Ralph Bostic said inflation was still well above the Fed’s 2% annual target, and expects rates to fall in 2024 eventually. He flagged only about 50 bps of cuts, much lower than markets expectation,” said Modi.

Anuj Gupta, Head of Commodity and Currency at HDFC Securities, said, “Yesterday gold prices closed flat up by 0.14% at 62,179 levels. Silver prices corrected by 0.52% and closed at 72,047 levels. The dollar index recovered from lower levels after FOMC minutes stated that the time is yet not confirmed when interest rates will start to be cut. We also see thin physical demand for gold and silver in the physical market.”

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Gold may trade between $2025 and $2035 levels, and on the MCX, it may trade between 61700 and 62500 levels. Silver may trade between Rs 71,500 and Rs 73,000 levels, analysts said.

Amit Khare, Associate Vice President at GCL Broking, said, “MCX Gold and Silver gave mixed closing yesterday. February Gold closed at 62179 (0.12%), and March Silver closed at 72047 (-0.52%). As per the daily chart, bullions are now trading near an important support zone.”

“Any time we see a good recovery from the support zone, the Momentum Indicator RSI also indicates the same. So 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 62400/62600. Silver March Support 72000/71000 and Resistance 74000/74500,” said Khare.