Gold prices extended gains on Thursday in the international market as the US Federal Reserve chair Jerome Powell sounded less hawkish than feared on future interest rate hikes, dragging the dollar and Treasury yields lower.
India's gold demand in the first half of 2022 jumped 42 percent from a year ago but consumption in the second half could be lower than last year as higher inflation erodes disposable income, the World Gold Council (WGC) said on Thursday.
At 9.17 am, gold contracts were trading 0.51 percent higher on the Multi-Commodity Exchange (MCX) at Rs 50,978 for 10 grams and silver spiked 2.11 percent at Rs 55,999.
The US Fed rate hike has been priced in by the precious metals prices. The price of gold may bounce towards resistance levels of Rs 51,400. Silver may move towards the immediate resistance levels of Rs 55,500. However, the upside in precious metals would remain limited as a stronger dollar may put pressure at upper levels. Gold has support at Rs 50,000 while silver has support at Rs 54,000, said Nirpendra Yadav, Senior Commodity Research Analyst at Swastika Investmart.
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Rahul Kalantri, VP Commodities, Mehta Equities
Gold and silver prices ended marginally higher Wednesday, and extended their gains into the electronic trading session after the Federal Reserve's decision to hike interest rates as expected. The US economic data released was lower than expected and supported precious metals at lower levels. The dollar index reacted negatively after the Federal Reserve meeting outcome and slipped below 106.40 and supported both precious metals.
Gold has support at $1728-1717, while resistance is at $1748-1761. Silver has support at $19.02-18.80, while resistance is at $19.40-19.62. In rupee terms gold has support at Rs 50,650–50,420, while resistance is at Rs 51,060–51,240. Silver has support at Rs 54,750-54,350, while resistance is at Rs 55,780–56,210.
Tapan Patel, Senior Analyst (Commodities), HDFC Securities
Gold prices traded firm on Thursday with spot gold prices at COMEX were trading 0.20% up near $1738 per ounce in the morning trade. Gold prices rallied after US Fed hiked key interest rates by 75 bps in line with market expectations. The Fed agreed that economic activities have slowed down and was less hawkish in their comments which drove prices to high. The US Fed is still committed to control inflation and is expected to raise interest rates by 200 bps in the remaining months of 2022. The sharp fall in dollar index also supported buying in the yellow metal.
We expect gold prices to trade sideways to up with COMEX Spot gold support at $1720 and resistance at $1750 per ounce. MCX Gold August support lies at Rs 50500 and resistance at Rs 51300 per 10 grams.
Pritam Patnaik, Head Commodities, HNI and NRI Acquisitions, Axis Securities
The US Federal Reserve hiked up its benchmark overnight interest rate by 75 basis points in an effort to bring down the burning inflation under control. The outcome of the meet was widely on expected lines. The Fed also indicated that the central bank could slow the pace and size of future rate hikes if the economy cools. The ongoing increases in borrowing costs against a backdrop of a decelerating economy, is a recipe for an economic meltdown.
The dollar index and bond yields cooled off due to the forward guidance on the rate trajectory, propelling gold prices. A drop of close to 8% in the physical demand in gold did little to dampen the rally, as the precious metal looks to unshackle from the bear grasp.
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