Gold Prices Today: Yellow metal to remain under pressure as Fed and strong dollar loom

Gold, gold prices

Gold prices gained on Wednesday in the international markets, following a selloff in the previous session that pushed bullion to a seven-month low, after the dollar halted its rally. Spot gold rose 0.4% to $1,770.71 per ounce, as of 0059 GMT. US gold futures firmed 0.3% to $1,768.80.

At 9.50am, gold contracts were trading higher by 0.18 percent at Rs 51,394 for 10 grams on the Multi-Commodity Exchange (MCX) while silver shed 0.47 percent to Rs 56,600 a kilogram.

In Comex, gold and silver prices gave up all the gains of the previous week, and slipped more than 2%. The dollar, which moves opposite gold prices, gained 1.50% yesterday. Brent crude oil prices fell to near 10% due to demand concern as recession fear putting pressure on energy prices. Cooling off in energy prices may reduce the worries of higher inflation, which makes gold prices complicated to sustain at higher levels. Day trend in bullion may remain down today. Gold has resistance at Rs 51700 and support at Rs 51000. Silver has resistance at Rs 57800 and support at Rs 56000, said Nirpendra Yadav, Senior Commodity Research Analyst at Swastika Investmart.

Track Live Gold Prices Here

Trading Strategy

Ravindra Rao, VP- Head Commodity Research at Kotak Securities

COMEX gold inched up to trade near $1770/oz after testing December lows yesterday. Gold has come under severe selling pressure as correction in crude oil and other commodities has reduced its appeal as an inflation hedge. Also, US dollar index’s rise to fresh 2002 shows that US currency is the preferred safe haven asset. ETF outflows also show that investors continue to exit the market. The sudden drop yesterday also shows positioning ahead of FOMC minutes which may reaffirm Fed’s tightening stance. Gold has fallen to fresh lows and market sentiment remains weak however yesterday’s sell-off was little overstretched and we may see some recovery if there is no negative surprise form FOMC minutes.

Tapan Patel, Senior Analyst (Commodities), HDFC Securities

Gold prices traded firm on Wednesday with spot gold prices at COMEX were trading 0.29% up near $1771 per ounce in the morning trade. Gold prices pared some losses after falling to nine month lows on stronger dollar. The dollar index rallied by 1.5% in previous session to 106.5 lowering demand for the yellow metal.

We expect gold prices to trade sideways to down for the day with COMEX Spot gold support at $1750 and resistance at $1785 per ounce. MCX Gold Aug futures support lies at Rs 50950 and resistance at Rs 51,600 per 10 grams.

Rahul Kalantri, VP Commodities, Mehta Equities

Gold and silver prices slumped to the lowest in more than six months as the dollar rallied amid growing recession fears that caused losses across the risky assets. Gold was down 1.50% while silver fell more than 2.50%. Gold prices hit nearly seven month lows while silver slipped to 2-year lows in the international markets. Gold and silver crashed vertically on Tuesday after the dollar index hit 20 year highs and crossed 106 marks on global recession fears.

A pronounced drop in the euro also aided the dollar’s gain, driven by bets that the European Central Bank will be slower in tightening monetary policy than the Fed. Gold has support at $1755-1742, while resistance is at $1782-1794. Silver has support at $19.30-19.05, while resistance is at $19.95-20.20.

In rupee terms gold has support at Rs 51,110–50,920, while resistance is at Rs 51,520–51,740. Silver has support at Rs 56,150-55,750, while resistance is at Rs 57,480–57,910.

Disclaimer: The views and investment tips expressed by experts on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.​