Gold prices surged on Thursday to the highest in more than three weeks as the US dollar and bond yields hit multi-month lows on mounting bets the Federal Reserve will start cutting interest rates as soon as next March.
February gold futures were trading at Rs 63,795 per 10 grams on the MCX at 10.20 am and were up by Rs 117 or 0.18% from Wednesday’s closing price. Meanwhile, March Silver futures were trading at Rs 75,690 per kg and were higher by Rs 43 or 0.06% around this time.
On Comex, the gold futures were trading at $2,096.8 per troy ounce up $3.8 or 0.18% while the silver futures were trading at $24.69 per troy ounce, up by $0.054 or 0.22%.
“The dollar index is under selling pressure and has made a new multi-month low of $100.9 as the probability of a rate cut in March increased, which boosted bullion prices. Prices are approaching the previous swing high of Rs 64,000 level. A weekly close above will be a bullish sign for gold prices, and it may touch Rs 65000 by next month,” said Deveya Gaglani, Research Analyst – Commodities, Axis Securities.
The dollar index hit a five-month low, making gold more attractive for overseas buyers, and 10-year Treasury yields touched their lowest since July 24.
As US inflation is showing signs of retreat, expectations of a rate cut by the Federal Reserve in March have strengthened, with traders now pricing in about a 90% chance.
“Gold is likely poised for further gains, building on its three-week high, as investors continue seeking refuge in the precious metal amidst anticipation of potential U.S. interest-rate cuts,” Saish Sandeep Sawant Dessai, Analyst at Angel One, said.”On the daily chart, Gold (December contract) is forming a higher high higher low pattern indicating bullishness in the market. Currently, the price is trading above its 21 & 50 Days EMA. The Relative Strength Index (RSI) is forming a positive divergence, indicating a bullish outlook. MACD indicator has shown a positive crossover adding to our bullish outlook,” said Neha Qureshi, Senior Technical & Derivative Analyst, Anand Rathi Commodities & Currencies.
“Looking at potential price levels, there is resistance on the upside at approximately 63900 and 64300. On the downside, support levels are observed around 62,900 and 62,650,” she said.
Market participants now await U.S. initial jobless claims data for further cues on monetary policy.
Spot silver rose 0.7% to $24.42 per ounce and was poised to end the year with a near 2% annual gain.
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