Today’s early morning deals saw a near 5% increase in gold prices, while domestic market silver prices today reached a 32-month high. Today’s opening bell at the commodity market saw the June 2023 gold futures contract on the MCX (Multi Commodity Exchange) start higher. Within a short period of time after the market began, it reached an intraday high of $60,343 per 10 gm. Today’s increase in the price of gold on the global market brought it very near to $2,000 per ounce levels.
Today’s silver rate opened with a gap upward as investors became more interested in purchasing the white metal as US dollar exchange rates loosened during morning trades in the Asian stock market. The May 2023 silver futures contract on the MCX opened higher than expected and increased to its 32-month high after reaching an intraday peak of 74,790 per kilogramme levels.
Experts in the commodities market believe that the recent increase in the price of gold and silver can be related to the weakening of the US dollar as the market awaits the release of Wednesday’s FOMC meeting minutes and US CPI data. They claimed that the increase in the US dollar over the previous three sessions was entirely speculative because the market anticipated a US Fed rate increase in response to the tight US non-farm payroll statistics. The US CPI data and the speeches by US Fed officials on Tuesday and Wednesday, however, would provide more clarity, which is why the US dollar was pressured to decline before the release of these data. According to them, the price of gold is currently fluctuating between a wider range of $1,980 and $2,050 per ounce and a smaller range of $1,980 to $2,010.
Concentrate on the US dollar
Anuj Gupta, Vice President of Research at IIFL Securities, commented on what drove gold prices today: “Recent sessions saw a decline in gold prices as the US dollar strengthened due to anticipation about a US Fed rate hike following the release of tight US non-farm job data. Nevertheless, since this increase in the US dollar rate was entirely speculative, the surge had to cease. For more information on the US Fed’s plan to raise interest rates at its meeting next month, the market is expecting the publication of US CPI data and FOMC meeting minutes on Wednesday. Yet, weak US CPI statistics could increase concerns about inflation and feed rumours that the US Federal Reserve will raise interest rates.”
Anuj Gupta advised gold investors to keep an eye out for critical levels “Above $1,980 per ounce, there is significant support for the gold price today. The support for the Dollar Index can be seen at levels around 100. In contrast, a violation of the present gold price support level of $1,980 may result in further decline in the price of the priceless yellow metal. If Dollar Index exceeds important support of 100, then one can expect a new leg of rallies in gold prices.”
Today’s pivotal levels for the price of gold, according to market expert Sugandha Sachdeva “Decoding the price setup reveals that the levels of $1,980 and then $1,945 per ounce align as a significant support area, while the cushion levels at the domestic markets are 59,700 per 10 gm and 58,500 per 10 gm. Prices are expected to rise upward to levels of around 61,700 per 10 gm and subsequently 62,500 per 10 gm at the domestic markets, which equate to levels of around $2,050 per ounce initially and a move towards its all-time high of $2,075 per ounce mark in the near term.”
Disclaimer: Currency Veda does not endorse the opinions or suggestions expressed above by specific analysts or brokerage firms. Before making any financial decisions, we suggest investors to consult with licenced professionals.
