Gold prices inched slightly lower sticking to the tight trading range seen over the past week as markets turned cautious ahead of the upcoming release of the Indian consumer price index (CPI)-based inflation data and the Index of Industrial Production (IIP) on the domestic front and the US consumer inflation data and Federal Reserve’s meeting on the international front.
Gold prices on the Multi Commodity Exchange (MCX) opened at Rs 59,713 per 10 grams and hit an intraday low of Rs 59,660. In the international market, prices hovered around $1,955.84 per troy ounce. Meanwhile, silver opened on Monday at Rs 73,551 per kg and hit an intraday low of Rs 73,230 on the MCX. The price hovered around $24.13 per troy ounce in the international market.
Anuj Gupta, Vice President of IIFL Securities, said the weakness in the dollar due to unstable US jobs data and expectations of a pause in interest rate hikes by Federal Open Market Committee (FOMC) in the next meeting might support gold and silver as safe-haven assets. However, the positive outcome on the debt ceiling front was providing support to investment demand. “We expect gold to test Rs 60,500 ($1,980–$1,990) very soon. If it is able to sustain above $1,990, then it may test $2,000 levels again. The $1,920 level is now being treated as support for the short term. Silver may test Rs 75,000 levels ($25), and if it is able to break (Rs 75,000/$25), then it may test Rs 76,500 ($26) levels soon,” he added.
Last week, gold saw some support as soft labour data pushed up expectations that the US Fed would maintain the status quo on interest rates. Besides, softening inflationary pressures will likely strengthen the Fed’s decision, given that it will skip a rate hike to bring down inflation when it concludes its two-day policy meeting.
