Gold opened on the Multi Commodity Exchange (MCX) on Monday at Rs 63,720 per 10 grams and hit an intraday low of Rs 63,720. In the international market, prices hovered around $2,087.43 per troy ounce.
Meanwhile, silver opened at Rs 78,150 per kg, hit an intraday low of Rs 78,150 on the MCX, and hovered around $25.5 per troy ounce in the international market.
Manav Modi, Analyst, Commodity and Currency, MOFSL, said, “Gold prices surged to a record on Comex trading above $2100, extending recent gains as markets bet that the Federal Reserve could begin cutting interest rates by as soon as March 2024, even as central bank officials remained cautious.”
The metal appreciated sharply in recent sessions on easing inflation, weak economic data points, geopolitical tensions and less hawkish signals from the Fed fuelled speculation that the bank will cut interest rates in early 2024.
Market participants ignored US Fed Governor Jerome Powell’s cautious tone in his speech last week and continue to discount rate cuts in early 2024, boosting the safe haven appeal for gold and silver.
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“Fed Chair Jerome Powell reiterated his stance that US rates will remain higher for longer, but his acknowledgement towards curbing inflation and the potential for a ‘soft landing’ for the US economy reinforced expectations that the Fed will no longer raise interest rates in December. Focus today will be US factory orders data,” said Modi.
Over the weekend, we also had a few updates regarding a dispute starting once again between Israel and Hamas, supporting metals on the lower end.
Jateen Trivedi, VP Research Analyst at LKP Securities, said, “Gold reached a new record high of $2148, surging over 3% in early morning trade in Comex, In MCX prices opened gap up by strong Rs 500 near 64000 at 63950 as Comex Gold gave up gains from 2148$ high to 2085$ still a positive rally of 16$ compared to Friday’s close.”
“This was driven by expectations that the Federal Reserve will maintain interest rates this month and potentially cut them in 2024. Despite Fed Chair Jerome Powell’s caution against premature rate-cut expectations, traders are confident in a 60% chance of a rate reduction in March, fully pricing in a cut by May,” added Trivedi.
Amit Khare, Associate Vice President at GCL Broking, “February Gold closed at 63357(1.10%) and March Silver closed at 78087(0.58%). As per the daily chart, Bullions are again looking strong and gave a fresh break out in the daily chart; Momentum Indicator RSI also indicates the same. Traders are advised to make new buy positions in Gold and Silver near the given support level one with the stop loss of support level two and book near the given resistance levels: Gold February Support 63200/62900 and Resistance 63600/64000. Silver March Support 77500/76600 and Resistance 78500/79000.”