Gold price today: Yellow metal trades below 49,000, silver falls over 1%

Gold was trading in the red in Indian markets on January 28, tracking muted trend seen in international spot prices. On the Multi-Commodity Exchange (MCX), February gold contracts were trading lower by 0.36 percent at Rs 48,688 for 10 grams at 0920 hours. March silver was trading 1 percent lower at Rs 65,869 a kilogram.

Investors can look at selling gold on every bounce towards 49,000, experts said. Overnight, US Fed’s downbeat growth outlook and ECB’s willingness to cut rates pushed the US dollar higher, putting pressure on gold, they said.

Gold and silver prices settled weaker in international markets on January 27 due to gains in the dollar index. February gold futures contract settled at $1,844.90 a troy ounce and March silver futures at $25.39 per troy ounce.

In domestic markets, both the metals settled on a mixed note.

Overnight, as expected the Federal Reserve left interest rates unchanged at the zero-bound range but noted that economic activity had moderated since its last meeting in December.

“The Federal Reserve said in a statement that the ongoing health crisis continues to weigh on the economic activities, employment, and inflation and possess a considerable risk to the economy,” Manoj Jain, Director (Head-Commodity & Currency Research) at Prithvi Finmart told Moneycontrol.

“We expect both the precious metals to remain volatile and strength in the dollar index could push the precious metals lower but it could hold lower-level supports. We suggest selling in the gold around 49,000 with the stop loss of 49,300 for the target of 48,500 and selling in the silver around 66,800 with the stop loss of 67,500 for the target of 65,200.”

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Ravindra Rao, VP- Head Commodity Research at Kotak Securities.

Comex gold was trading 0.5 percent lower at $1,835 after declining 0.3 percent the previous day. Gold weakened as the Fed painted a downbeat outlook for the US economy but did not hint towards additional measures.

The Fed’s downbeat growth outlook and ECB’s willingness to cut rates pushed the US dollar higher, putting pressure on gold. ETF outflows also showed weaker investor interest.

Lower bond yields, mixed economic data from major economies, and rising virus cases supported prices. Gold has come under pressure but was unlikely to see a sustained decline as the US economic outlook and stimulus expectations may limit upside in the dollar.

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