Gold prices in domestic and international markets continued to rise on April 13 as softer-than-anticipated US inflation data raised expectations of the US Federal Reserve pausing the rate-hike cycle in May.
At 10.21 am, the June gold contract on the Multi Commodity Exchange of India was at Rs 60,799 per 10 grams, up 0.3 percent, while Comex gold was at $2,032.90 a troy ounce, up 0.4 percent from the previous close.
Data showed inflation in the US fell slightly in March, which supported sentiments among gold traders.
“This inflation report is promising for disinflation trends but it doesn’t mean the Fed’s tightening work is done,” Ed Moya, senior market analyst at OANDA, Americas, said in a note. “Fed swaps were volatile and some traders were thinking that maybe the Fed would hold off on that May hike, but it seems the market is thinking one more and then they are done,” he added.
The minutes of the Fed’s last meeting showed that some policymakers were in favour of suspending rate hike but were also worried about a "mild recession" later this year due to the banking sector crisis.
Some banks collapsed in the US in March, which raised concerns that negative sentiments would spill over to other sectors as well.
How will the day pan out?
“We expect gold to trade higher towards Rs 61,020 levels, a break of which could prompt the price to move higher to Rs 61,340 levels,” said Prathamesh Mallya, AVP- research, non-agri commodities and currencies, Angel One.
“Gold may pullback a bit, however, dip buying is advisable,” said Praveen Singh, currencies and commodities analyst at Sharekhan by BNP Paribas. For gold, support is at $2,000-$1,975 an ounce on COMEX and resistance is at $2,032-$2,050 per ounce, according to Singh.
“Gold’s bullish outlook remains intact, but it seems prices may be stuck in a consolidation phase until we have a clearer outlook for the economy,” Moya said.
Domestic gold rates are likely to remain high on robust demand from consumers ahead of Akshaya Tritiya and amid the summer wedding season.
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