The price of gold yesterday increased by 0.1% to 59355 as traders analyzed the most recent changes to monetary policy. The Federal Reserve stopped it’s tightening drive but made a suggestion that interest rates might rise again this year. At the same time, the ECB announced a further 25 bps increase in borrowing costs and reaffirmed its intention to continue raising interest rates.
The BoE is also anticipated to raise rates once again the following week. The People’s Bank of China, on the other hand, dropped two important interest rates by 10 basis points tomorrow, the first decrease since August 2022, while the BoJ is expected to keep its ultra-loose monetary policy in place. According to market forecasts, the ECB increased interest rates by another 25 basis points and hinted at further increases as long as inflation is expected to be too high.
The deposit facility jumped to a 22-year high-interest rate of 3.5% while the major refinancing operations now have an interest rate of 4%. The capacity utilization rate in the US dropped from an upwardly revised 79.8% in April to 79.6% in May 2023, which was below expectations of 79.7%. Additionally, it is 0.1 percentage points below its historical average. The mining operating rate decreased by 0.3 percentage points to 92.2.
Technically, the market is experiencing new buying as open interest increased by 0.43% to settle at 13610 while prices increased by 57 rupees. Currently, gold is receiving support at 58883 and a move below that level could result in a test of the 58410 levels. Meanwhile, resistance is now likely to be seen at 59607, and a move above could result in a test of 59858.
