Gold rallied on Wednesday in international markets as the dollar and Treasury yields retreated after the Federal Reserve announced the biggest US interest rate hike since 1994 and flagged economic risks.
The Fed raised its target interest rate by three-quarters of a percentage point to stem a surge in inflation and projected a slowing economy and rising unemployment in months ahead.
Spot gold rose 1.4% to $1,833.42 per ounce by 4:09 p.m. EDT (2009 GMT), while US gold futures settled up 0.3% at $1,819.60 per ounce.
At 9.29am, gold contracts were trading 0.36 percent higher at Rs 50,619 for 10 grams on the Multi-Commodity Exchange (MCX), while silver gained 0.62 percent to Rs 61,075 a kilogram.
Precious metals gained in the previous session as the US dollar and benchmark Treasury yield remained down before the Fed meeting. Fed raised the interest to 1.75% from 1% previously. It remained more hawkish than expected in curbing rising inflation. However, precious metals gained on expectations of economic damage due to the aggressive rate hike. Technically, gold and silver prices may witness selling pressure at upper levels. Gold has support at Rs 50000 and resistance at Rs 51200. Silver has support at Rs 59500 and resistance at Rs 62000, said Nirpendra Yadav, Senior Commodity Research Analyst at Swastika Investmart.
Rahul Kalantri, VP Commodities, Mehta Equities
The gold and silver market is holding its ground and clocked modest gains after the Federal Reserve raised interest rates by 75 basis points and indicated aggressive rate hikes through the rest of the year to cool inflation. Markets were happy to see the Fed taking inflation seriously, according to analysts. Also mid-week saw an emergency meeting of the European Central Bank. The governing council will discuss current market conditions.
Gold has support at $1816-1805, while resistance is at $1840-1851. Silver has support at $21.24-20.85, while resistance is at $21.65-21.85. In rupee terms gold has support at Rs 50,240–50,010, while resistance is at Rs 50,780–51,150. Silver has support at Rs 60,120-59,550, while resistance is at Rs 61,380–61,710.
Tapan Patel, Senior Analyst (Commodities), HDFC Securities
Gold prices held steady on Thursday with COMEX spot gold prices trading near $1832 per ounce in morning. Gold prices held strong after Fed rate decision. The weaker dollar and fall in US bond yields pushed bullion prices higher on economic growth worries.
We expect gold prices to trade sideways to up for the day with COMEX spot gold support at $1810 and resistance at $1842 per ounce. MCX gold August support lies at Rs 50100 and resistance at Rs 50900 per 10 grams.
Ravi Singh - Vice President and Head of Research - ShareIndia
Gold prices are witnessing indecisiveness as growth worries, geopolitical uncertainty and spiralling inflation are pulling it up whereas firm US dollar and upside in bond yield is eroding gold’s sheen. The Fed's aggressive rate hike is also on the cards, putting pressure on gold prices. Investors are not able to decide whether to buy on dips or short on highs. Gold indecisiveness may remain for sometime.Buy zone near Rs 50300 for target of Rs 50500
Sell zone below Rs 50200 for target of Rs 50000Disclaimer: The views and investment tips expressed by experts on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.