Gold rate today under pressure as US dollar rate jumps ahead of FOMC meeting. Buy or wait for more correction?

Gold rate today: On account of the rising US dollar ahead of the US Fed meeting, gold price today witnessed sharp selling during morning deals. Gold future contract on the Multi Commodity Exchange (MCX) for April 2024 expiry opened lower at 65,348 per 10 gm level and went on to touch an intraday low of 65,180 within a few minutes of the commodity market opening. However, the yellow metal witnessed some buying at the lower levels and pared some of the early morning losses. The MCX gold rate today is currently quoting around 65,260 per 10 gm. In the international market, spot gold price is oscillating around $2,146 per ounce level.

Silver rate today witnessed heavy correction in the early morning session. Silver price on MCX opened lower at 75,400 per kg and went on to touch an intraday low of 75,200 level. In the international market, silver price is around $25 per ounce level.

According to commodity market experts, after the hotter-than-expected US inflation data for February 2024, the US PPI print further hit speculation about a near-term US Fed rate cut in the upcoming FOMC meeting this week. They said that such speculations about the US Fed rate triggered buying in the US dollar that fueled the US dollar index at a one-week high. They said that despite a 0.50 percent correction in gold and silver prices today, the risk-reward ratio is still not conducive. They advised investors to wait for at least 2 percent more correction in both metals.

US dollar rate in focus

Pointing towards the rise in the US dollar index ahead of the US Fed meeting, Anuj Gupta, Head — Commodity & Currency at HDFFC Securities said, “Gold and silver prices are under pressure today as the US dollar index has further ascended after regaining the 103 mark. The US dollar index has ascended to a one-week high on US Fed interest rates remaining unchanged in the upcoming FOMC meeting this week.”

The HDFC Securities expert said that the rise in the US dollar rate can be attributed to disappointing US inflation data and the PPI print for February. This has triggered buying in the US currency and US Treasuries.

Key levels to watch

On important levels regarding gold and silver prices, Sugandha Sachdeva, Founder of SS WealthStreet (Formerly WealthWave Insights) said, “In terms of the key levels, surpassing the 66,000 per 10 gm mark is crucial to sustain buying momentum; otherwise, profit booking could trigger a knee-jerk reaction in prices. Looking ahead to the next week, gold is likely to find support at the $2,120 per ounce mark, corresponding to around 64,300 per 10 gm at the domestic markets.”

Expecting more correction in gold and silver prices, Anuj Gupta of HDFC Securities said, “Market is expecting status quo on the US Fed interest rate in the FOMC meeting scheduled this week from Tuesday to Wednesday. So, there can be some more rallies in the US dollar that may further put pressure on the yellow and white metal prices. So, in the current market scenario, the risk-reward ratio is not favourable for bullion market investors. They should wait for at least 2 percent more correction in the gold and silver prices and then take a position for the medium to long term. By the end of September 2024, we are expecting that the gold price may go up to 67,000 to 67,500 per 10 gm level.”

Disclaimer: The views and recommendations above are those of individual analysts, experts, and broking companies, not of Mint. We advise investors to check with certified experts before making any investment decisions.

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