Precious metals to edge lower in near term as investors expect hawkish monetary policy
Manoj Kumar Jain of Prithvi Finmart Commodity Research expects gold and silver prices to remain weak due to the strong dollar and could show further weakness in the upcoming sessions.
Gold prices fell on February 17 in the international markets and were set for a weekly drop, as a firmer dollar and worries of more interest rate hikes by the US Federal Reserve clouded the outlook for non-yielding bullion.
Spot gold was down 0.3 percent at $1,832.42 per ounce, as of 0051 GMT. Bullion has fallen 1.7 percent this week. US gold futures fell 0.6 percent to $1,841.
At 09:53 am, gold was down 0.61 percent on the Multi Commodity Exchange (MCX) at Rs 55,884 for 10 grams, while silver was trading lower by 0.85 percent at Rs 65,078 per kilogram.
Saumil Gandhi, Senior Analyst (Commodities), HDFC Securities
Gold prices traded lower on Friday with spot gold prices at Comex were trading lower by 0.40 percent at $1828 per ounce in the morning trade. Gold prices dropped to six weeks low on previous session on back of rallied in the US dollar and bond yields after recent strong US macro data fueled expectations that the Federal Reserve might keep raising interest rates.
The benchmark US 10-year Treasury yields rose to their highest in over a month, while the dollar extended gains to six weeks high.
We expect gold prices to trade on the negative side for the day, with Comex spot gold support at $1819 per ounce and resistance at $1850 per ounces. MCX Gold April Future has support at Rs 55,700 per 10 grams and resistance at Rs 56,580 per 10 grams.
Nirpendra Yadav, Senior Research Analyst, Swastika Investmart
Precious metals prices remained under pressure yesterday as US PPI and unemployment claims data came in better than expected. However, the Philly Fed manufacturing index remained weaker, indicating slow manufacturing activity in the US, which supported bullion prices at lower levels. Precious metals’ near term trend may remain down as investors are expecting hawkish monetary policy going ahead.
Gold has resistance at Rs 56,600 and support at Rs 55,800. Silver has support at Rs 65,000 and resistance at Rs 66,000.
Manoj Kumar Jain, Prithvi Finmart Commodity Research
Gold and silver prices on February 16 settled on a slightly positive note in the international markets. Gold April futures contract settled at $1,851.80 per troy ounce, up by 0.35 percent and silver March futures contract settled at $21.71 per troy ounce, up by 0.18 percent. Domestic markets also settled on a positive note.
The US Philly Fed manufacturing index shows a contraction of 24.3 against previous reading of a contraction of 8.9. Downbeat US Philly Fed manufacturing index data, strength in the dollar and weakness in the US equity markets restricted gains of precious metals.
We expect gold and silver prices to remain weak due to the strong dollar and could show further weakness in the upcoming sessions. Gold has support at $1838-1822, while resistance is at $1866-1878 per troy ounce. Silver has support at $21.44-21.20, while resistance is at $21.94-22.20 per troy ounce.
At MCX, gold has support at Rs 56,080-55,900 and resistance at Rs 56,440-56,580 while silver has support at Rs 65,100-64,750 and resistance at Rs 66,000-66,650. We suggest selling gold around Rs 56,350 with a stop loss of Rs 56,580 for target of Rs 55,900.
With agency inputs
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