Gold Prices Today: Yellow metal eyes key level of $2,000 as US bank crisis keep investors on their toes

Prices had risen sharply on Thursday after higher-than-expected US jobless claims last week pointed to a slowdown in the country’s jobs market.

Gold traded slightly higher in India even as international prices were flat today, staying close to the psychologically-important level of $2,000 per ounce on COMEX.

Prices had risen sharply on Thursday after higher-than-expected US jobless claims last week pointed to a slowdown in the country’s jobs market. The safe-haven appeal of the precious metal increases when the economy struggles.

Moreover, quarterly GDP data from the US also pointed to further deterioration in the country’s economy. US’ GDP growth during October-December of last year was at 2.6 percent, which was slightly lower than analysts’ expectation of 2.7 percent.

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Experts believe that the ongoing banking crisis in the US is expected to continue weighing on the credit markets in the country, and could even tip the economy into recession. This will probably mean that the US Federal Reserve could afford to not raise interest rates any further, and even start with multiple rate cuts later in 2023.

“This is positive for the yellow metal and could ultimately prove to be the catalyst that not only enables it to overcome the $2,000 psychological barrier but also eye up the all-time highs near $2,070,” Craig Erlam, senior market analyst at OANDA, UK, said.

Gold prices outperformed most asset classes in March after the collapse of the Silicon Valley Bank in the US. The collapse raised fears about its effects spilling over to other sectors, and hitting economic activities.

The yellow metal’s safe-haven appeal benefited from the cloudy economic outlook in the world’s biggest economy, the US. Crisis in the banking sector also prompted investors to price in a less hawkish Fed at the upcoming meetings, which is bullish for gold.

On the Multi Commodity Exchange of India (MCX), gold contracts have support at Rs 59,700-Rs 59,480 per 10 grams, while resistance at Rs 60,050-Rs 60,255 per 10 grams. For silver contracts, support is at Rs 71,200-Rs 70,750 per kilogram, and resistance is at Rs 72,200-Rs 72,850 per kilogram.

“We suggest buying gold on dips around Rs 59,650 (per 10 grams) with a stop loss of Rs 59,330 for the target of Rs 60,100 and also suggest buying silver on dips around Rs 71,250 (per kilograms) with a stop loss of Rs 70,700 for the target of Rs 72,500,” Manoj Jain, director at Prithvi Finmart said.

As of 0531 GMT, US gold futures were at $1,996.05 per ounce, largely unchanged from the previous close.

At 11.02 am, gold was up 0. 2 percent on the MCX at Rs 59,460 per 10 grams, while silver was up 0.3 percent at Rs 71,966 a kilogram.

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