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Gold Prices Today: Yellow metal to remain under pressure as Fed remains hawkish

Gold is likely to face steep resistance at higher levels but silver is in a highly oversold zone and some short covering is possible at lower levels, Kumar Jain of Prithvi Finmart Commodity Research has said

March 09, 2023 / 10:25 AM IST

Gold was trading a tad lower in India but edged higher in the international market as the dollar eased, though US Federal Reserve chair Jerome Powell's hawkish remarks limited gains in zero-yielding bullion.

At 10.07 am, gold was down 0.19 percent on the Multi Commodity Exchange (MCX) at Rs 54,805 for 10 grams, while silver was down 0.4 percent at Rs 61,570 a kilogram.

Spot gold, however, was up 0.1 percent at $1,815.58 a troy ounce at 0046 GMT after hitting a one-week low on the previous day. US gold futures were unchanged at $1,819.10.

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Ravindra Rao, CMT, EPAT, VP- Head Commodity Research at Kotak Securities

Comex gold futures further eased on March 8 and held near the lowest since the start of the year on prospects of higher rates in the US.

Powell said in testimony this week that the US central bank was prepared to increase the pace of rate hikes should data, including employment, job openings, consumer prices and producer prices, come in hot.

The comments boosted the greenback and US two-year treasury yields traded above 5 percent at a 15-year high, dampening the demand for the non-yielding yellow metal.

Markets are expecting the Fed to hike rates by 50 basis points in the March FOMC meeting, if labour data, expected on March 10, and next week’s CPI come in hot.

US ADP employment data showed that private businesses unexpectedly created 2,42,000 jobs in February, well above an upwardly revised 1,19,000 in January and market forecasts of 2,00,000, boosting expectations for NFP due tomorrow.

We expect the negative momentum to persist in gold prices.

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

On March 8, gold ended nearly unchanged, as the yellow metal held near one-week lows, ending at $1,813.6 per ounce.

The opportunity cost of storing non-yielding bullion increased following anticipation of higher interest rates in the US.

After Powell hinted that interest rates would stay higher for longer than expected, the dollar reached multi-month highs against the majority of other major currencies.

We expect gold to trade lower towards Rs 54,650, a break of which can prompt the price to move to Rs 54,460.

Saumil Gandhi, Senior Analyst (Commodities), HDFC Securities

Gold traded marginally weak on March 9. Gold prices consolidated in the lower range after prices hit a one-week low in the previous session as traders waited for fresh cues.

Investors' focus will now be on the US jobs report for February due on March 10. Global gold ETF investment trimmed in February led by European funds, while North American funds saw small outflows.

We expect gold prices to consolidate in the range of $1,804-1,823 with negative bias for the day. Comex spot gold has support at $1,804-1,791 and resistance at $1,823-1,840.

MCX April gold futures have support at Rs 54,580 and resistance at Rs 55,300.

Rahul Kalantri, VP-Commodities, Mehta Equities

Gold and silver prices were slightly lower on March 8. The ADP national employment report for February came in slightly hotter than expected at 242,000 jobs compared to a consensus forecast of a rise of 205,000.

Traders and investors are looking forward to the February US employment situation report from the labour department.

Gold and silver will likely remain volatile. Gold has support at $1,802-1,788 and resistance at $1,828-1,840. Silver has support at $19.81-19.65, while resistance is at $22.24-21.40.

In rupee terms, gold has support at Rs 54,580-54,410, while resistance is at Rs 55,080-55,310. Silver has support at Rs 61,420-61,010, while resistance is at Rs 62,490–62,880.

Manoj Kumar Jain, Prithvi Finmart Commodity Research

We expect gold to face steep resistance at higher levels but silver is in a highly oversold zone and some short coverings is possible at lower levels.

Gold has support at $1,804-1,788, while resistance is at $1,834-1,845. Silver has support at $20.00-19.66, while resistance is at $20.44-20.70.

On MCX, gold has support at Rs 54,770-54,520 and resistance at Rs 55,100-55,330. For silver, support is at Rs 61,550-61,100 and resistance at Rs 62,220-62,750.

We suggest buying silver around Rs 61,500 with a strict stop loss of Rs 61,100 for target of Rs 62,250.

(With agency inputs)

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Sandip Das
first published: Mar 9, 2023 10:25 am