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Gold Prices Today: Bullion to remain under pressure amid rise in dollar index, US Fed forecast of rate hikes

As the US Fed is expected to raise interest rates, gold prices are likely to remain under pressure, says Prathamesh Mallya of Angel One

March 13, 2023 / 10:18 AM IST

Gold was trading higher in the Indian as well as the international market on March 13 morning to their highest in more than five weeks as the dollar weakened, while jitters over the largest US bank failure since the 2008 financial crisis drove investors to the safe-haven asset.

At 9.45 am, gold was up 0.85 percent on the Multi Commodity Exchange (MCX) at Rs 56,630 for 10 grams, while silver jumped 1.22 percent to Rs 63,658 a kilogram.

Spot gold was up 0.5 percent at $1,877.30 a troy ounce at 00:51 GMT after hitting its highest since February 3 earlier in the session at $1,893.96. US gold futures gained 0.8 percent to $1,882.10.

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Prathamesh Mallya, AVP- Research, Non-Agri Commodities, and Currencies, Angel One

The upside in the yellow metal was extended further as the bullion concluded the week on a higher note, being the only commodity to end with gains in the previous week. Due to recent positive economic indications, investors are still uncertain whether the US Federal Reserve would resume significant rate hikes.

Bullion is projected to be under pressure as a result of this week's increase in the dollar index and forecasts of additional rate hikes. Despite the fact that gold is often used as an inflation hedge, zero-yield metal demand tends to fall as interest rates rise. As the Fed is expected to raise interest rates, gold prices are likely to remain under pressure.

Rahul Kalantri, VP Commodities, Mehta Equities

Gold and silver market posted an unexpected weekly gain on potential contagion risks from the Silicon Valley Bank (SVB) meltdown and heavy selling in the dollar index. Gold and silver prices reached a month's high and crossed their important resistances.

The US non-farm employment shows a growth of 3,11,000 jobs in February against an expected growth of 2,24,000 but data is well below the January month's 5,17,000.

The US unemployment also surged to 3.6 percent in February against expectations of 3.4 percent. The dollar index fell and the two-year yield posted its biggest two-day decline since 2008, which is supportive of higher gold prices. The Fed has called an emergency meeting on March 13 after the SVB bank saga, which could keep precious metals volatile.

We expect gold and silver prices to remain volatile on March 13. Gold has support at $1,852-18,40 and resistance at $1,871-1,880. Silver has support at $20.44-20.25, while resistance is at $20.82-20.98.

In rupee terms, gold has support at Rs 56,020-55,710, while resistance is at Rs 56,510, 56,780. Silver has support at Rs 62,420-62,010, while resistance is at Rs 63,490–63,980.

Deveya Gaglani, Research Analyst - Commodities, Axis Securities

Gold prices rallied in the last session after weak unemployment rate data from the US dragged the dollar index lower. Comex Gold prices touched a month's high of around $1,882 as the expectation of an aggressive rate high by the Fed is now 30 percent compared to 60 percent earlier. The dollar index drifted from the high of $106 down to $103.8, which supported bullion prices.

The Silicon Valley Bank (SVB) spooked the global market which boosted bullion prices and acted as a hedge against uncertainty in the market. Over the weekend, the Fed rolled out emergency measures to make borrowing easier for embattled banks.

The White House also assured Silicon Valley Bank depositors that it will cover all withdrawals. Comex Gold is heading towards $1,900, which may act as a strong resistance. Support is seen at around $1840.

(With agency inputs)

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Sandip Das
first published: Mar 13, 2023 10:18 am