The U.S Fed may continue to be hawkish, putting pressure on precious metals

While investors anticipated this week’s U.S. inflation statistics for clues on the Federal Reserve’s interest rate hike path, gold prices inched lower on Monday in the international markets as the dollar strengthened. At $1,861.76 per ounce, spot gold was down 0.2 percent. The price of U.S. gold futures fell by 0.1 percent to $1,872.40. On February 10, the price of gold and silver in international markets ended on a negative note. The troy ounce price of gold for the month of April was $1,876.50, down 0.11 percent, and the troy ounce price of silver for the month of March was $22.01, down 0.60 percent. Also ending on a lower tone were domestic markets.

Manoj Kumar Jain, Prithvi Finmart Commodity Research, said the U.S. Federal Reserve may be forced to retain its hawkish position on monetary policy and may further raise interest rates, which would weigh on bullion prices, say market experts if U.S. inflation continues to rise. Ahead of the U.S. inflation statistics, gold prices may test their support level of $1,855 per troy ounce, and silver prices may test levels of $21.80 per troy ounce. Support levels for gold per troy ounce are $1,864–1,855, while resistance levels are $1,888–1,900.

Support for silver per troy ounce is at $21.80, while resistance is at $22.30 and 22.70. Silver has support around Rs 66,100-65,550 and resistance at Rs 67,220-67,800 on the MCX, while gold has a support range of Rs 56,500-56,280 and a resistance range of Rs 56,920-57,080. With a stop loss of Rs 57,250 and a target price of Rs 56,300, we advise selling gold while it is rising around Rs 56,950.

NS Ramaswamy, Head of Commodities, Ventura Securities, told As traders awaited additional hints on the U.S. economy from significant inflation data due this week, COMEX gold is trading lower in early trading. Despite the softening of inflation, the Federal Reserve recently stated that it intends to continue rising interest rates. The U.S. yield curve inversion reached its steepest level since the 1980s, which put pressure on gold prices as well as short-term Treasury yields that were rising. Support for COMEX gold is located close to $1,864; resistance is found at $1,882.

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