Gold prices stayed flat in the international markets on January 19 near a one-week low hit in the previous session. The US Treasury yields firmed up to two-year highs on hopes of faster interest rate hikes by the Fed.
Benchmark US Treasury yields jumped to two-year highs on Tuesday, as traders prepared for the Federal Reserve to be more aggressive in tackling unabated inflation, ahead of its meeting on January 25-26.
On the Multi-Commodity Exchange (MCX), gold contracts dipped 0.01 percent to Rs 47,921 for 10 grams at 9.32am and silver futures added 0.19 percent to Rs 63,140 a kilogram.
COMEX gold trades little changed near $1,812/oz after a 0.2 percent decline on Tuesday. Gold trades in a range as support from inflation concerns, rising virus spread and geopolitical issues is countered by higher US and global bond yields, firmness in the US dollar and lack of ETF buying. Gold continues to trade in a broad range of $1,780-1,830/oz range and this may continue with mixed factors in place, however, higher yields may keep pressure on prices, said Ravindra Rao, CMT, EPAT, VP - Head Commodity Research at Kotak Securities.
Trading Strategy
Manoj Kumar Jain, Prithvi Finmart Commodity Research
Gold and silver showed mixed trend in a highly volatile session on January 18. Gold slipped again amid strength in the dollar and record gains in the US bond yields but silver gained and hit seven-week highs in the international markets. We expect both the precious metals to remain volatile today and continue to hold their support levels. Gold has support at $1,800-1,788 per troy ounce and resistance at $1,822-1,834 per troy ounce, while silver has support at $23.20-22.88 per troy ounce and resistance at $23.70-24.10 per troy ounce.
At MCX, gold has support at Rs 47,770-47,650 and resistance at Rs 48,050-48,220, while silver has support at Rs 62,600-62,100 and resistance at Rs 63,500-64,100. We suggest buying gold around Rs 47,800 with a stop loss of Rs 47,650 for a target of Rs 48,100.
Abhishek Chauhan, Head of Commodity & Currency, Swastika Investmart
Investors are jittered over heavy sell-off in risky assets due to weak earning data and fear of rising inflation which boosts the investment demand for a safe haven. Crude oil prices also soared more than 1 percent which supported the gold and silver prices. On MCX, gold prices advanced 0.15 percent and silver rose 2.15 percent. However, the dollar, which moves opposite to gold prices, also gained 0.50 percent, while the bond yield rose to 1.85 percent which capped the gain of precious metals. Gold and silver prices are looking firm at this level and are likely to continue their upside momentum.
Vidit Garg, Director, MyGoldKart
Gold prices could not follow up silver movement on Tuesday as stronger dollar and strengthening US 10-year yields capped its movement. The metal is caught between two ways - rising yields and inflationary storm. Technically, gold may trade in range of $1,798 and $1,825 today, traders may look to buy at $1,805 and $1,798 with a stop loss of $1,792 for a target of $1,816-1,822.
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