This week, market participants will be closely monitoring US GDP data and the personal consumption expenditures price index.
On Tuesday, gold prices commenced trading on the Multi Commodity Exchange (MCX) at Rs 62,240 per 10 grams, reaching an intraday low of Rs 62,200. Internationally, prices remained around $2033.4 per troy ounce.
In the same vein, silver opened at Rs 69,659 per kg on the MCX, dipping to an intraday low of Rs 69,250. Internationally, the price hovered around $22.56 per troy ounce.
Gold prices experienced a sharp correction of 0.31% yesterday, closing at 62149 levels. Similarly, silver prices concluded on a negative note, declining by 1.49% and closing at 69430 levels.
According to Manav Modi, Analyst specializing in Commodity and Currency at MOFSL, "Gold and silver prices slipped in yesterday's session due to better-than-expected data from the US and delayed rate cut expectations."
The decline in industrial metals added further downward pressure on silver prices. Several US Federal Reserve officials cautioned against rushing to cut interest rates; indications of persistent US inflation and resilience in the job market reinforced this sentiment. As a result, traders are gradually scaling back expectations of rate cuts in May and June.
Modi stated, "Currently, markets are estimating an approximately 80% likelihood of a rate cut in 2024, with a 62% probability of the first quarter-point cut occurring in June. Favorable US weekly jobless claims and Manufacturing PMI figures supported the Dollar Index."
Yesterday, sales of new single-family homes in the US increased less than anticipated in January, while the Dallas Fed's monthly manufacturing activity index showed a positive reading.
"Market attention is now turned to the upcoming US durable goods orders data expected later today. Additionally, this week's focus will be on US GDP figures and the core personal consumption expenditures (PCE) price index— the preferred gauge of inflation by the US Federal Reserve. Domestically, gold prices may range between Rs 61,800 and Rs 62,500," added Modi.
Jateen Trivedi, VP Research Analyst, LKP Securities, said, "Gold prices experienced volatility during the week, fluctuating between 62200 and 62340. The week began with a minor gap-down opening, influenced by weakness observed in the Comex market at the start of Monday morning."
Market participants are closely monitoring major data releases that are expected to impact both the US Dollar and Gold prices throughout the week. As a result, heightened volatility is anticipated in the Gold market.
“Traders and investors are advised to remain vigilant and monitor developments closely to capitalise on potential opportunities in the Gold market," said Trivedi.
