Gold, silver prices: Gold prices remain volatile due to a lack of clarity on interest rates from FOMC meeting

Gold prices on the Multi Commodity Exchange (MCX) opened on Tuesday at Rs 59,755 per 10 grams and hit an intraday low of Rs 59,743. In the international market, prices hovered around $1,958.42 per troy ounce. Meanwhile, silver opened on Tuesday at Rs 73,298 per kg and hit an intraday low of Rs 73,250 on the MCX. The price hovered around $24.11 per troy ounce in the international market.

Anuj Gupta, Vice President of IIFL Securities, said, “Yesterday, gold prices corrected by 0.36% and closed at Rs 59,622 levels. In the international market, it is trading at $1,957 levels per ounce. We noticed a range-bound movement in the gold prices due to a lack of clarity from the FOMC front on interest rates and further policy decisions. The market is also awaiting US CPI data which further gives a move to the gold. However, the undertone of gold is positive, so we recommend buying on dips in gold prices.”

“Technically, there was a strong support at Rs 59,400 levels and then Rs 59,100 levels, resistance at Rs 59,900 and then Rs 60,200 levels. One can buy around Rs 59,300-59,400 levels with a stop-loss of Rs 59,100 and for the target of Rs 59,900 to Rs 60,000 levels. Gold may test $1,965 to $1,970 levels soon,” added Gupta.

Moreover, interest rate decisions from the European Central Bank and the Bank of Japan are pending this week. 

Manav Modi, Analyst, Commodity and Currencies, MOFSL, said, “Gold and silver prices inched lower in the yesterday’s session as the dollar and bond yields firmed, while markets turned cautious ahead of upcoming US consumer inflation data and a swathe of major central bank meetings this week. Inflation data, due today, is expected to bring further clarity on the Fed’s decision, given that the central bank’s main goal in this aggressive rate hike cycle has been to bring down inflationary concerns. While inflation is well below the near 40-year highs seen through 2022, it is still above the Fed’s 2% annual target.”

Modi added: “The expectation is of 4.1%, quite lower than the previous number of 4.9%; which, if reported, it could support metal prices. Markets participants are pricing in a more than 80% chance of the Fed keeping rates unchanged, and a 60% chance of a hike in July, according to CME’s Fedwatch tool. Broader trend on COMEX could be in the range of $ 1940-1980 and on domestic front prices could hover in the range of Rs 59,250- 59,850.”