Gold, silver prices: Gold may rise further as analysts expect a pause in the US Fed’s interest rate hikes

Gold prices on the Multi Commodity Exchange (MCX) opened on Wednesday at Rs 59,977 per 10 grams and hit an intraday low of Rs 59,960. Gold prices hovered around $1,964.75 per troy ounce in the international market.

Similarly, silver opened on Wednesday at Rs 71,883 per kg levels and hit an intraday low of Rs 71,813 on the MCX. The silver price in the international market was around $23.61 per troy ounce.

Anuj Gupta, Vice President of IIFL Securities, says, “Yesterday gold traded higher and closed 0.23 per cent at Rs 59,985 levels. In the international spot market, it is trading at $1,965 levels. Gold prices are taking positive cues from the US Fed decision, where the expectation of a pause in interest rates in the upcoming FOMC meeting. For today, we expect a positive trend in the prices; strong support at Rs 59,600 levels and then Rs 59,300 levels, and resistance at Rs 60,200 and then Rs 60,500 levels. One can buy around Rs 59,600-59,700 levels with a stop loss of Rs 59,300 and for the target of Rs 60,200–60500 levels. Gold may test $1,980–1,985 levels soon."

Manav Modi, Analyst, Commodities and Currencies, Motilal Oswal Financial Services Ltd. (MOFSL), said the price of gold witnessed volatility in a narrow range as cautious traders awaited the U.S. Federal Reserve’s interest rate decision at its policy meeting next week. A softer dollar and US yields, trading below 104 and 3.7 mark, respectively, kept the bullion supported. Fed officials till now were preparing the market for an interest hike of around 25bps, however after mixed economic data points, tighter labour market we are witnessing a change in tone. "Market participants are currently witnessing around 80 per cent probability for a pause and 20 per cent chance for a 25 bps rate hike in June meeting. The U.S. consumer price report for May on June 13, ahead of the Fed’s much awaited meeting, will provide investors more clarity on the health of the economy following recent economic data and dovish remarks from Fed officials. For this week, focus shifts to growth data from Japan & EU and RBI policy meeting,” added Modi.

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