Gold and Silver Prices Today :-
Gold Prices Steady Amidst Economic Data and Federal Reserve Hopes
Gold prices opened at Rs 59,570 per 10 grams on the Multi Commodity Exchange (MCX) and hovered around $1,938.55 per troy ounce in the international market. Silver, on the other hand, opened at Rs 75,099 per kg and was around $24.23 per troy ounce in international markets. While gold prices have been showing some stability, the recent economic data and Federal Reserve hopes have influenced the precious metal market.
Economic Data Influence:
Manav Modi, an analyst in the Commodity and Currency sector, noted that gold prices firmed up due to hopes that the Federal Reserve might pause interest rate hikes this year. This optimism stemmed from the US data showing an increase in the unemployment rate. However, despite these positive indicators for gold, bullion prices remained below the previous session’s one-month highs, primarily due to a strong dollar and yields.
The US dollar continues to trade near its recent three-month highs, staying above the 104 mark. Furthermore, US yields are still above the 4% level, indicating support for further rate hikes by the Federal Reserve.
Modi explained, “Last week, the US Core PCE price index was more or less in line with expectations. US job growth picked up in August, but the unemployment rate jumped to 3.8%, and wage gains moderated.” These factors triggered immediate buying momentum in safe-haven assets like gold. However, the gains were limited as the US manufacturing PMI contracted for the 10th straight month in August, remaining below the 50-mark.
Federal Reserve Hopes:
Amid these economic indicators, bets for a pause in the September Federal Reserve meeting have increased to more than 90%. This suggests that the Federal Reserve might take a more cautious approach in its monetary policy decisions.
Market Analysis and Outlook:
Amit Khare, Associate Vice President at GCL Broking, pointed out that MCX Gold and Silver had mixed closings recently. While gold closed with a slight gain, silver faced a minor decline. Bullion daily charts showed signs of profit booking, and the momentum indicator RSI indicated the same. Traders were advised to book long positions and consider fresh short positions in gold and silver near given resistance levels.
Praveen Singh, Associate V.P., Fundamental Currencies and Commodities at Sharekhan by BNP Paribas, highlighted the softer-than-expected US nonfarm payroll report for August. While the headline job figure was higher than expected, July data was revised lower, continuing a trend of downward revisions in monthly job reports this year. Singh also noted that a decline in temporary help jobs could potentially lead to more significant job losses in the future.
In the context of gold prices, Singh explained that the yellow metal initially rallied on the soft US job report, but the rally was short-lived due to various factors. Heavy corporate bond issuance, ISM prices paid data, and the belief that certain seasonal factors may have understated the job figures were among these factors.
Overall, while gold prices remain influenced by economic data and Federal Reserve expectations, they continue to show resilience. Gold bulls may aim to test the $1965 resistance level in the near term, with interim resistance at $1955. Support levels are at $1931 and $1914, and overall, dip buying is expected to be a preferred trading strategy in the current market conditions.
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