Gold Prices Today: Dollar surge may keep yellow metal under pressure in short to medium term

Gold, gold prices

Gold prices slipped on Wednesday in the international markets as the dollar resumed its rise after Federal Reserve officials reiterated the US central bank's resolution to maintain an aggressive policy stance to tackle soaring inflation.

Spot gold was down 0.3 percent at $1,624.81 per ounce, as of 0132 GMT. US gold futures dipped 0.2 percent to $1,632.4.

At 10:00 am, gold contracts were trading 0.1 percent lower on the Multi-Commodity Exchange (MCX) at Rs 49,271 for 10 grams and silver was down 0.77 percent at Rs 54,953 a kilogram.

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Pritam Patnaik, Head - Commodities, HNI and NRI Acquisitions, Axis Securities

A feeble attempt by gold to try and breach the $1650 levels was met with a barrage of hawkish Fed chatter that push back prices. The Minneapolis Fed chair was clear that the central bankers stand united in their battle against inflation and are ready to do whatever that is needed to ensure the same, which clearly indicates higher rates. This was further re-affirmed when the Chicago Fed president indicated that the interest rates could be scaled higher towards 4.75 % to reign in the runaway inflation. These statements are music to the ears of USD bulls, putting immense negative pressure on Gold. We expect the gold markets to remain under pressure in the short to medium term.

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

Yellow metal prices saw a recovery from their 2-and-a-half-year lows, as a minor decline in the dollar index caused the prices to revert to positive territory. On Tuesday, the bullion closed at $1628.8$ per ounce, up 0.45 percent. The escalation on the Russia and Ukraine front may limit the negative risk for gold, which acts as a safe haven asset during periods of global unpredictability. However, the safe haven gold is also seen as a hedge against inflation, the interest rate hikes dampen the demand for the metal.

We expect gold to trade lower towards Rs 49010 levels, a break of which could prompt the price to move lower to Rs 48590 levels.

Nirpendra Yadav, Senior Research Analyst at Swastika Investmart

Precious metals look firm due to the ease in the US dollar index. Despite aggressive rate hikes US consumer confidence and new home sales data stood stronger and reduced the fear of recession which may cap the gain for bullion prices. Any rise in bullion prices could be a good selling opportunity. Gold has resistance at Rs 49600 and support at Rs 48900. Silver has resistance at Rs 56200 and support at Rs 55300.

(with agency inputs)

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