Gold Prices Today: Range-bound movement likely ahead of US inflation data, support at Rs 47,550

Gold prices stayed flat on January 12 in the international markets as traders focused on US inflation data for rate clues after less-hawkish comments from the Federal Reserve chief fuelled a bullion rally last session.

On the Multi-Commodity Exchange (MCX), gold contracts were down 0.09 percent at Rs 47,645 for 10 grams at 9.37am. Silver futures shed 0.14 percent to Rs 61,017 a kilogram.

The two metals surged amid a sell-off in the dollar and easing fear of earlier rate hikes after the Federal Reserve Chairman Testimony. Both the precious metals settled on a positive note in the international markets.

"We expect both the precious metals to remain volatile in today’s session ahead of the US inflation data and continue to hold its support levels. Gold has support at $1,804-1,792 per troy ounce and resistance at $1,832-1,844 per troy ounce, while silver has support at $22.55-22.20 per troy ounce and resistance at $23-23.34 per troy ounce," said Manoj Kumar Jain of Prithvi Finmart Commodity Research.

At MCX, gold has support at Rs 47,550-47,400 and resistance at Rs 47,800-48,055, while silver has support at Rs 60,660-60,300 and resistance at Rs 61,400-62,000. "We suggest buying gold on dips around Rs 47,550 with a stop loss of Rs 47,380 for a target of Rs 47,900 and silver around Rs 60,800 with a stop-loss at Rs 60,300 for a target of Rs 62,000," Jain said.

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COMEX gold trades little changed near $1,820/oz after a 1.1 percent gain on January 11. Gold edged up as the US bond yields and the US dollar index came under pressure following the Fed chairman’s comments.

Fed Chairman Jerome Powel reiterated that the central bank may end bond buying and start interest rate hike this year. However, weighing on the price is recovery in equity market and weaker investor interest as is evident from ETF flows. Gold continues to trade in the $1,780-1,830/oz range amid mixed factors and this trend may continue however Fed’s tightening expectations may keep pressure on prices.

Gold gained 0.40 percent after Fed chair Powell testified. He said inflation is rising due to pandemic-related disruptions. Fed includes rate hike this year and trims its balance sheet by the end of the year. However, the Fed has not decided on the timing of monetary policy action. The dollar usually moves opposite to gold which fell down 0.33 percent on January 11 and supported gold prices. In MCX, gold has resistance at Rs 47,850 and support at Rs 47,300.

Gold prices climbed 1 percent on Tuesday as the dollar slipped after US Federal Reserve Chair Jerome Powell's testimony before Congress did not spring any surprises in terms of monetary tightening, while a retreat in bond yields also lent support. Focus now shifts to the US core CPI data on Wednesday, which is expected to have risen by an annual 5.4 percent in December from 4.9 percent in the prior month.

Technically, gold may trade flat in the range of $1,812-1,826 before the CPI data and breach of this range will fuel the rally. Further upside for bulls will come if breakout comes above yesterday's high which is placed at $1,824.

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