Due to the dollar’s resurgence against its rivals, precious metals have been sluggish during the last few weeks. On February 2, 2023, gold fell by about 5% from a peak of Rs 58,847 on the MCX to Rs 55,850. Comex Gold’s 6.48 percent decline from $1,960 to $1,833 had a more significant effect. According to NS Ramaswamy, Head of Commodities at Ventura Securities, silver also felt the effects, falling about 10.88 percent from highs of Rs 72,769 to Rs 64,850.”U. S. Fed chairman’s hawkish remarks on interest rates led to this month’s rise of the dollar index. All eyes were on the U.S.non-farm payrolls increase of 5,17,000 for January, which was far higher than the consensus estimate of 1,88,000.
Moreover, retail sales statistics increased by 3% in January, above expectations. U.S. 10-year yield would be expected to decrease further if there were any signs of the Fed’s formal turn, which may result in higher gold prices.”Inflation is extremely strong and is expected to continue for a few quarters. Eventually, the benefits of growing inflation must flow to gold. Data like U.S. interest rates, inflation, or geopolitical events are all that matter for gold to move higher. This year still looks good for gold performance if inflation does not show any indications of slowing down,” he added. Under pressure from rising short-term yields, gold prices are currently trading downward.
The latest numbers on unemployment claims were uneven when compared to robust non-farm payrolls. The dollar index recently overcame a significant obstacle near 104, opening the way for movement into its levels of resistance between 106 and 108. With immediate resistance located around Rs 57,000, it is anticipated that MCX Gold will correct to levels close to Rs 54,500. While Comex Gold is anticipated to be bearish and range-bound, taking support at $1,800, below which there is immediate support at $1,785, and firm support at $1,755, as long as the USD-INR pair remains elevated and the rupee does not strengthen, there is protection for gold in rupee terms. Added Ramaswamy.
Considering feelings and the worldwide cacophony around various economic indicators, he added that investors should prefer to remain on the short side of the gold market until April 2023. On the other side, looking for deals is a wise short-term approach to developing long positions at various support levels. In the medium run, the expert predicted that Comex Gold would trade at roughly $1950 and MCX Gold would trade between Rs 59,000 and 60,000.
