Gold prices rose in the domestic futures market, mirroring strong global cues as the yellow metal rose in foreign markets after the dollar and bond yields dipped ahead of inflation data from the United States and India.
Gold prices rose in morning trade in the domestic futures market, mirroring strong global indications as the yellow metal rose in foreign markets after the dollar and bond yields dipped ahead of inflation data from the United States and India.
“The dollar index fell 0.2% to its lowest level since May 11, making gold cheaper for holders of other currencies.” Benchmark 10-year US Treasury yields have likewise fallen to their lowest level in nearly a week,” according to Reuters.
The US inflation statistic, which is anticipated later today, will be carefully watched by investors since it will indicate how the US Fed will proceed with rate hikes. If inflation decreases, gold prices will rise.
On July 26, the Fed is expected to hike interest rates by 25 basis points. While rate hikes put pressure on gold, many believe the market has already priced in a 25 basis point hike after last week’s jobs report indicated the US economy remains resilient.
Around 10:30 a.m., MCX Gold for August delivery was trading 0.20 percent higher at 58,890 per 10 grams.
COMEX gold prices pushed higher and closed near a two-week high of $1,937.1 per troy ounce, according to Ravindra V. Rao, CMT, EPAT, VP-Head Commodity Research at Kotak Securities, after a decrease in the greenback and US benchmark government yields.
“The yellow metal has steadily risen in recent days as the dollar index fell to a two-month low of 101.4 levels, as the Fed nears the end of its current cycle of rate hikes.” Several Fed officials have stated that they will likely raise interest rates further to reduce inflation, but they have also stated that the present monetary policy tightening cycle is nearing its end,” said Rao.
“Resilient June labor data and the prospect of higher core CPI could cement expectations for a quarter-point hike at the July FOMC meeting.” The US CPI statistics will be the main focus of the day. According to Bloomberg, the headline CPI is projected to fall to 3.1% year on year (YoY), but the core CPI may remain at 5% YoY. According to June predictions, elevated core inflation may increase the chances of a second 25 basis point boost in September. “This could be a short-term headwind for gold prices,” Rao added.
What should your gold approach be today?
Most analysts expect gold to remain volatile throughout today’s session, therefore they recommend using a stop loss when betting on the yellow metal.
According to Rahul Kalantri, VP of Commodities at Mehta Equities, trade activity may be low today ahead of the US inflation report.
“We anticipate that gold and silver will remain volatile in today’s session.” The support level for gold is $1,926-1,914, while the resistance level is $1,948-1,959. “Silver has support at $23.01-22.88 and resistance at $23.42-23.54”, according to Kalantri.
“In terms of Indian rupees, gold has support at 58,610-58,480, and resistance at 59,120, 59,350.” “Silver has support at 70,550-70,120 and resistance at 71,640-72,080,” Kalantri added.
According to Manoj Kumar Jain of Prithvifinmart Commodity Research, gold and silver prices will remain volatile this week due to volatility in the dollar index and the release of US inflation data.
“Gold prices are expected to test $1,958 per troy ounce this week, while silver may test $24 per troy ounce.” The support level for gold is $1,922-1,914, while the resistance level is $1,948-1,962 per troy ounce. “Silver has support at $23-22.84 per troy ounce, and resistance at $23.55-23.80 per troy ounce,” added Jain.
“On the MCX, gold has a support level of 58,550-58,330 and a resistance level of 59,000-59,220, while silver has a support level of 70,700-70,200 and a resistance level of 71,650-72200.” We recommend purchasing gold around 58,600 with a stop loss of 58,380 for a target of 59,100, as well as purchasing silver around 70,800 with a stop loss of 70,200 for a target of 72,000,” Jain said.
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