Gold opened on the Multi Commodity Exchange (MCX) on Thursday at Rs 58,242 per 10 grams and hit an intraday low of Rs 58,140. In the international market, prices hovered around $1,897.35 per troy ounce. Meanwhile, silver opened at Rs 70,562 per kg, hit an intraday low of Rs 70,457 on the MCX, and hovered around $22.71 per troy ounce in the international market.
Spot gold extended its decline to the third consecutive day on surging U.S. yields and a firmer Dollar. The metal closed with a loss of 1.24 per cent at $1877. Ten-year US yields jumped by 1.39 per cent to a fresh 16-year high of 4.61 per cent, thus boosting the U.S. Dollar Index that rose for the fifth straight day to close with a gain of 0.43 per cent at 106.67.
Praveen Singh, Associate V.P., Fundamental Currencies and Commodities, Sharekhan by BNP Paribas, said, “Total known global gold ETF holdings fell for the second straight day. Spot gold has fallen below the key support at $1885, making the metal increasingly vulnerable. Support is at $1865/$1850. Resistance is at $1885/$1900.”
Gold hovered near a more than six-month low hit in the last session, as the dollar and Treasury yields held at elevated levels, with markets awaiting U.S. economic data for clues on the Federal Reserve’s interest rate path.
Manav Modi, analyst of commodity and currency Motilal Oswal Financial Services, said, “The dollar hit a 10-month high against its major crosses, and U.S. Treasury yields climbed a fresh 16-year peak on the back of further rate hike expectations.”
Comments from Fed officials this week also signalled to the market that the Fed could raise rates further to bring inflation to its 2 per cent target. On the data front, orders for long-lasting US manufactured goods rose in August, as an increase in machinery and other products offset a drop in civilian aircraft, and business spending on equipment appeared to regain momentum after faltering early in the third quarter.
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Republican US House Speaker Kevin McCarthy on Wednesday rejected a stopgap funding bill advancing in the Senate, bringing closer the fourth partial US government shutdown in a decade with just four days to go.
Modi said, “Market focus now turns to the revised US GDP growth rate for the second quarter and weekly jobless claims due later in the day, with the August personal consumption expenditures (PCE) price index, the Fed’s preferred inflation gauge, scheduled tomorrow.”
Amit Khare, Associate Vice President at GCL Broking, said, “October Gold closed at 57672 (-1.29 per cent) and December Silver closed at 70549 (-1.64 per cent). Bullion’s daily charts are trading at an oversold zone. Anytime we can see a good short covering rally in billions. Momentum Indicator RSI also indicates the same. So, traders are advised to make fresh buy positions in Gold and Silver near the given support level one with the stop loss of support level two and book near the given resistance levels: Gold October Support 57500/57300 and Resistance 57900/58100. Silver December Support 70500/69600 and Resistance 71500/72000.”
Anuj Gupta, Head of Commodity and Currency at HDFC Securities, said, “For trading, gold may trade between $1860 to $1880 levels and on MCX, it may trade between 57200 to 57900 levels. It may test $1865 to $1860 levels as the dollar index trades higher due to the hawkish statement given by the Fed.”