Gold prices in domestic and international markets rose ahead of the release of the US GDP data and personal consumption expenditures price index, which is expected to show that growth in the world's biggest economy is slowing down.
The PCE data from the US is the Federal Reserve's preferred gauge for measuring inflation. The central bank is likely to monitor the data closely.
If economic growth is slowing in the US, the Fed may rethink its strategy on monetary policy in the coming months. The market expects the central bank to pause its rate hike cycle in June after a 25-basis point increase in May. This bodes well for gold prices as the yellow metal is a non-yielding metal, which performs well when interest rates are low or not rising any further.
At 09.55 am, the price of gold on COMEX was at $2,008.35 per ounce, up 0.6 percent from the previous close. The June gold contract on Multi Commodity Exchange of India was at Rs 60,145 per 10 grams, up 0.4 percent.
The price of silver on COMEX was at $25.330 per ounce, up 1 percent from the previous close, while the May contract of silver on MCX was at Rs 74,335 per kilograms.
"It looks like gold’s best friend is a little bit of financial stress as that has helped swaps no longer fully price in a rate hike by mid-year," said Ed Moya, senior market analyst at OANDA, Americas.
Even if data points to an economic slowdown, and fears of a possible recession rise, Fed officials have called for more interest-rate hikes to cool down inflation. Analysts said that if the central bank keeps raising rates, gold may struggle to reach near its record highs.
On COMEX, gold prices have support at $1,984-1972 per ounce, while resistance is at $2,010-2,022 per ounce. Silver has support at $24.80-24.40, while resistance is at $25.40-25.84 per ounce.
On MCX, gold has the support of Rs 59,700-59,440 per 10 grams and resistance at Rs 60,060-60,280. The silver contract has support at Rs 73,350-72,700 per kilograms and resistance at Rs 74,450-75,100.
"We suggest selling silver on rise around Rs 74,400 per 10 grams with a stop loss of Rs 74,950 for the target of Rs 73,300," said Manoj Kumar Jain, director at Prithvi Finmart.
Back home, domestic gold demand remains poor due to the higher prices of the yellow metal and lack of wedding dates in the month of April.
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