Sun. Jun 4th, 2023
  • In India, gold rates are up 3,500 per 10 gram in past six weeks.

Gold rates in India edged higher, nearing 9-month highs, while silver also rose, tracking firm global rates. On MCX, gold futures were up 0.3% to 54,310 per 10 gram while silver rose 0.4% to 68,072 per kg. In global markets, gold remained in a narrow range as investors were cautious ahead of US inflation data and the Federal Reserve’s rate-hike decision. Spot gold in global markets was up 0.1% at $1,783.16 per ounce while silver rose 0.2% to $23.34 per ounce.
“We expect bullion prices to remain volatile in today’s session. Gold has support at $1772-1764 while resistance is at $1794-1808. Silver has support at $23.10-22.82, while resistance is at $23.55-23.78. In rupee terms, gold has support at 53,780-53,650, while resistance is at 54,280, 54,450. Silver has support at Rs67,150-66,580, while resistance is at Rs68,320–68,880,” said Rahul Kalantri, VP Commodities, Mehta Equities Ltd.
The US inflation data is set to be announced later today while Fed and ECB policy meeting is also due later this week. Traders now expect 50-basis-point rate hike by the Fed.
Lower rates tend to be beneficial for bullion as it decreases the opportunity cost of holding the non-yielding asset.
Apart from expectation of a slowdown in rate hikes by global central banks, continued easing of covid restrictions in China – the world’s biggest gold consumer – has also helped lift gold rates in past two months. In India, the price of the yellow metal is up 3,500 in past six weeks. 
While the US annual Producer price index (PPI) data released last week showed some softening of inflation when compared to the previous figures, it was mildly higher than the forecast. 
“The extent of the improvement in inflation is not enough for the Fed to become dovish. However, as the economist believes that CPI is the better measure of inflation, next week’s US CPI data will be an important market mover as a softer print might support the belief that inflation is actually moderating. Immediately following the US CPI data, the Federal Open Market Committee (FOMC) will conclude its two days meeting, the last for the year. On the price front COMEX Gold is still holding the double top resistance at $1825/oz. A sustained break above $1825/oz on closing might push the price further higher Support near $1778/oz below which we can conclude a temporary top near $1825,” Kotak Securities said in a note. 
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