Precious metal may remain volatile ahead of Fed meet outcome
Saumil Gandhi, Senior Analyst (Commodities), HDFC Securities expects gold prices to consolidate in upper range with positive bias before the Fed policy outcome.
Gold prices edged down in international markets on March 21 ahead of the Federal Reserve policy meeting outcome on March 22. Investors expect the US central bank to pause raising interest rates given the recent upheaval in the US banking system.
Spot gold was down 0.1 percent at $1,977.69 per ounce, as of 0044 GMT. US gold futures also fell 0.1 percent to $1,981.30.
At 9:52 am, gold was up 0.23 percent on the Multi Commodity Exchange (MCX) at Rs 59,641 for 10 grams, while silver added 0.14 percent to Rs 68,935 a kilogram.
Rahul Kalantri, VP Commodities, Mehta Equities Ltd
Bullion prices were highly volatile on Monday, with gold hitting a 12-month high and silver a six-week high in international markets. Gold price on MCX crossed the Rs 60000 mark for the first time ever. However, both gold and silver witnessed profit taking ahead of the Fed meeting outcomes and chart consolidation were seen on the price pullbacks from the day’s high. Still, safe-haven demand for the metals is evident in a shaky general marketplace amid the US and European banking crisis.
The technical charts are also bullish for gold and silver, which continues to invite chart-based speculators to the long sides.
We expect gold and silver prices to remain highly volatile in today’s session. Gold has support at $1965-1954 while resistance is at $1994-2010. Silver has support at $22.36-22.22, while resistance is at $22.70-22.86. In rupee terms, gold has support at Rs 59,110-58,850, while resistance is at Rs59,880, 60,150. Silver has support at Rs 68,020-67,510, while resistance is at Rs 69,290–69,880.
Saumil Gandhi, Senior Analyst (Commodities), HDFC Securities
Gold prices traded flat to positive on March 21, with spot gold prices at Comex trading slightly up by 0.15% at $1983 per ounce in the morning trade. Gold prices retreated on Monday after price hit fresh 52 week high of $2010 per ounce on back of short-term traders took profit and fears of a full-blown banking meltdown eased. Now investors’ focus turned to a Federal Reserve policy decision on March 22 which could provide further direction for yellow metals. Market estimated a roughly 70% chance of a 25-basis point increase.
We expect gold prices to consolidate in upper range with positive bias before the Fed policy outcome. Comex spot gold has supports at $1959-1940 per ounce and resistance at $2010-$2023 per ounce for the day. MCX Gold April future has support at Rs 58900 per 10 gram and resistance at Rs 60400 per 10 grams.
Manoj Kumar Jain, Prithvi Finmart Commodity Research
Gold and silver prices on March 20 settled on a mixed note in the international markets. Gold April futures contract settled at $1,980.70 per troy ounce, down by 0.01% and silver May futures contract settled at $22.63 per troy ounce, up by 0.35%. Due to weakness in the rupee, domestic markets settled on a positive note.
Gold and silver showed profit taking from their highs ahead of the Fed meeting outcome but overall long-term trend is bullish for precious metals. If Fed holds interest rates it could further support bullion prices in the international markets.
We expect gold and silver prices to remain volatile this week. Gold could hold $1922 and silver could hold $21.50 per troy ounce levels. Gold has support at $1966-1950, while resistance is at $2000-2015 per troy ounce. Silver has support at $22.30-21.88, while resistance is at $22.90-23.34 per troy ounce.
At MCX, gold has support at Rs 59220-58950 and resistance at Rs 59800-60000 while silver has support at Rs 68200-67750 and resistance at Rs 69350-69800. We suggest buying silver on dips around Rs 68400 with a stop loss of Rs 67750 for target of Rs 69,500 and wait for some corrective dips in gold for initiating fresh positions.
(With agency inputs)
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