Gold prices commenced trading on the Multi Commodity Exchange (MCX) with an opening at Rs 62,261 per 10 grams on Tuesday, reaching an intraday low of Rs 62,220. In the global market, gold prices hovered around $2028.27 per troy ounce.
Simultaneously, silver opened at Rs 70,451 per kg on the MCX, touching an intraday low of Rs 70,318. The international silver price stood around $22.45 per troy ounce.
Analyst Manav Modi from MOFSL stated, “Gold prices fell yesterday, extending losses from the previous week as a mix of strong labor market data and hawkish Federal Reserve signals saw markets dial back expectations for early interest rate cuts.”
The dollar index observed a 0.5% rise, nearing a three-month high around the 104.50 mark. Concurrently, yields on benchmark 10-year Treasury notes climbed to over a one-week high, hovering around 4.15%.
A notably stronger-than-expected nonfarm payrolls reading for January displayed continued resilience in the largest global economy, providing the Federal Reserve with more flexibility to maintain higher rates for an extended period.
Over the weekend, Fed Chair Jerome Powell emphasized in an interview that the bank would exercise prudence in considering any monetary loosening in 2024, given the U.S. economy’s resilience.
The CME Fed watch tool indicated a significant reduction in bets on a March rate cut and a sharp decline in expectations for a May rate cut. Some Fed officials still anticipate the possibility of a rate cut in the second half of the year.
Deveya Gaglani, Research Analyst – Commodities at Axis Securities, noted, “Gold prices extended the losing streak in the last session as the Fed Chairman indicated that a rate cut is not on the table as of now after better-than-expected data print from the USA last week indicated that the sky-high interest rate is being absorbed and the economy is resilient.”
Chief of Commodity and Currency at HDFC Securities, Anuj Gupta, commented, “Yesterday gold prices corrected sharply by 0.39% and closed at 62316 levels, and silver prices also corrected sharply by 1.02% and closed at 70480 levels.” He added that prices are approaching the strong support zone of 62,000 levels, and a weekly close below this level would be bearish, potentially touching 61,500, unless they continue trading in the range between 62,000 and 63,000.
