In global markets, gold edged lower to $1,832.91 per ounce.  Higher interest rates and bond yields raise the opportunity cost of holding bullion, which yields no interest. Among other precious metals, spot silver dipped 0.5% to $21.28 per ounce while platinum fell 0.3% to $923.

Federal Reserve Chair Jerome Powell in his testimony before Congress on Wednesday said the central bank was fully committed to bringing prices under control even if doing so risked an economic downturn. The Fed chair also said that while he didn’t see the likelihood of a recession as particularly elevated, it was a possibility. Powell is due to testify again in Washington D.C. later on Thursday.

“Gold and Silver prices eased on Wednesday post the Fed chairman’s testimony and firming up of the dollar. Bullions traded in a narrow range as investors awaited fresh cues from top central banks on their monetary policy plans, especially from the US Federal Reserve,” said Rahul Kalantri, VP Commodities, Mehta Equities Ltd. 

“Fed Chairman Powell’s testimony was a reiteration of the Fed’s commitment to bring down inflation with aggressive rate hikes that may send the economy into a recession. Geopolitical uncertainty and rising concerns of economic slowdown are likely to support the precious metals. Gold has support at $1828-1816, while resistance is at $1852-1861. Silver has support at $21.10-20.85, while resistance is at $21.65-21.95. In rupee terms gold has support at ₹50,540–50,210, while resistance is at ₹50,980–51,240. Silver has support at ₹60,120-59,550, while resistance is at ₹61,380–61,710,” he added. 

With central banks emphasizing on rate hikes to get inflation under control, there is also an increasing debate about impact of tightening on economic growth. Oil prices continued to slide today, dropping more than 2% as investors recalibrated assessments of recession risks and fuel demand amid interest rate hikes in major economies. Brent crude futures slid $2.5, or 2.3%, to $109.22 a barrel.

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