Gold Prices Today: Political tension to support yellow metal prices but strong dollar may cap gains

Gold, Yellow Metal, precious metal

Gold prices inched lower on Wednesday in the international markets as the dollar steadied, while the US Federal Reserve's commitment to tightening monetary policy also weighed on the zero-yield bullion's appeal.

Spot gold was down 0.1 percent at $1,650.75 per ounce, as of 0125 GMT. US gold futures were up 0.1 percent at $1,657.30.

At 10am, gold contracts were trading 0.11 percent lower on the Multi-Commodity Exchange (MCX) at Rs 50,360 for 10 grams and silver shed 0.17 percent at Rs 56,261 a kilogram.

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Nirpendra Yadav, Senior Research Analyst at Swastika Investmart

Gold and silver prices remained range bound as the US dollar index gained marginally. US industrial production data stood better, putting pressure on precious metals prices. Technically, gold prices are taking support at 200-DEMA. However, the short-term trend may remain down. Any rise in gold prices toward resistance levels could be a selling opportunity.

Gold has resistance at Rs 50,800 and support at Rs 50,000. The short-term trend in silver may remain down. It has resistance at Rs 57,000 and support at Rs 55,300.

Rahul Kalantri, VP Commodities, Mehta Equities

Gold prices were flat to marginally lower on Tuesday. In a volatile trading session, gold and silver lost their early gains following a hawkish remark from a Fed official who said the Fed may push its benchmark rate above 4.75 percent if underlying inflation does not cool off. After the remarks from the Fed official the dollar index surged once again and the US 10-year bond yields also crossed 4 percent. Gold and silver also plunged amid sharp corrections in crude oil prices.

However, Russia-Ukraine tensions and global recession fears are supporting safe-haven buying in precious metals. Gold has support at $1640-1628, while resistance is at $1662-1674. Silver has support at $18.20-17.90, while resistance is at $18.82-18.99. In rupee terms gold has support at Rs 50,180-49,940, while resistance is at Rs 50,610, 51,780. Silver has support at Rs 55,480-54,910, while resistance is at Rs 56,980–57,510.

Jigar Trivedi, Senior Research Analyst- Commodity & Currency at Reliance Securities

Gold prices held around $1,640 an ounce in subdued trade and trading sideways and remaining under pressure from expectations that the US Federal Reserve will continue raising interest rates aggressively to stamp out inflation. The dollar index steadied around 112 remaining supported by expectations that the Federal Reserve will push ahead with its aggressive tightening plans to bring down inflation. We expect MCX Gold December to trade lower to Rs. 50,250 per 10 gram.

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

COMEX gold trades flat near $1656 per ounce after a near 0.5 percent fall in yesterday’s session. Gold has been trading flat since the American currency showed signs of exhaustion at the top. However, a hawkish Fed is capping gains in the yellow precious metal. ETF outflows continues but the pace has reduced as indicated by holdings in the SPDR gold trust.

The holdings fell by 0.29 tonnes to 938.81 tonnes, a fall by 0.03 percent. ETF holdings are witnessing outflows as investors are worried about bullions performance amid Fed’s aggressive monetary policy stance. Although gold is holding $1650 an ounce level a strong bullish momentum may start only if we see a sustained down move in the American currency.

Deveya Gaglani, Research Analyst, Axis Securities

Gold price is hovering around $1,640 level from the past few days. The dollar index has mostly dictated the gold price movement in the recent past. China had delayed its key economic data, which created a cloud of uncertainty among global participants regarding its industrial health. On the other hand, Bloomberg Economics Forecast US Recession Within Year, which may boost Gold price in the near term. Aggressive rate hike is already priced in for Gold. The downside pace has gradually slowed down as denoted by the technical indicators. Prices are reluctant to break below $1640, so we could notice a short covering which could take prices till the level of $1670 in coming weeks.

With agency inputs

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