Gold prices opened on the Multi Commodity Exchange (MCX) on Monday at Rs 58,913 per 10 grams and hit an intraday low of Rs 58,913. In the international market, prices hovered around $1,923.60 per troy ounce. Meanwhile, silver opened at Rs 72,339 per kg and hit an intraday low of Rs 72,300 on the MCX. The price hovered around $23.02 per troy ounce in the international market.
Anuj Gupta, Head of Commodity and Currency at HDFC Securities, said gold prices will likely trade in a broader range of $1880 to $1930 amid the FOMC meeting. Volatility will likely increase post-policy. Falling below $1880 opens further downside towards the $1855 level. A recovery above $1930 will extend the rally towards $1955. “The silver price is expected to trade in a range of 22.10 to 23.80 with a positive bias. The buy-on-dip strategy should be used until the price remains above the $22.10 level. The MCX Silver December future is expected to trade in a range of 69700 to 73800,” Gupta said.
Due to the increase hike, the interest rate by the ECB is supportive of bullion, but the dollar index is trading above 105 levels, putting pressure. Fresh trends will only be decided after the FOMC meeting.
Gold prices were flat in early morning trade after a recovery seen towards the end of the previous week, as investors continued to price in a pause in interest rate hikes by the Federal Reserve at their policy meeting this week, focusing on the U.S. central bank's rate outlook.
Manav Modi, Analyst, Commodity and Currency, MOFSL, said, “Dollar Index and US yields continue to trade higher, above the 105 and 4.3 per cent mark, capping some gains for metal prices. Michigan consumer sentiment and US industrial production were reported lower than expectations on Friday, supporting an up-move in bullions.”
“Fed officials have been giving mixed statements regarding the interest rate expectations. However, they agree that inflation concerns still exist, and Fed’s efforts to bring the same down to its target of 2 per cent could continue. Despite an increase in US CPI and PPI at the start of this week, expectations of a pause are increasing for the Fed meeting this week. Bets now for a pause in rate hikes in the September meeting is at 99 per cent, and for the November meeting has risen to more than 70 per cent. No major economic data is scheduled on the calendar from the US today,” he said.
Amit Khare, Associate Vice President at GCL Broking, said that October gold closed at 58993 (0.69 per cent) and December Silver closed at 72154 (1.65 per cent). Bullion daily charts are looking good and making a bottom, trading near the demand zone. Momentum Indicator RSI also indicates the same. “So, traders are advised to make fresh buy positions in Gold and Silver near given support level one with the stop loss of support level two and book near given resistance levels: Gold October Support 58800/58600 and Resistance 59100/59200. Silver December Support 71700/71000 and Resistance 72500/73000,” said Gupta.