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Business News/ Markets / Commodities/  Gold price jumps as US dollar hits 7-week low on US Fed rate hike. Silver rates today at 7-week high
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Gold price jumps as US dollar hits 7-week low on US Fed rate hike. Silver rates today at 7-week high

Gold rate today is facing immediate hurdle at $1,980 per ounce levels while silver rate today has immediate resistance at ₹70,500 per kg levels, say experts

Gold prices are soaring because US dollar rate has hit 7-week low as US Fed officials displayed less hawkish stance on interest rate hike after FOMC meeting, believe commodity market experts.Premium
Gold prices are soaring because US dollar rate has hit 7-week low as US Fed officials displayed less hawkish stance on interest rate hike after FOMC meeting, believe commodity market experts.

Gold rate today regained 59,000 per 10 gm levels whereas silver rate today climbed to 7-week high in early morning deals. Gold price today opened with an upside gap at 59,231 and went on to hit intraday high of 59,283 per 10 gm levels in morning session. In international spot market, gold price today opened upside and hit intraday high of $1,976 per ounce levels.

Similarly, silver rates today opened upside and hit intraday high of 69,800 per 10 kg levels on MCX, hitting 7-week high in the intraday trade session. However, in international market, silver price was down 0.25 per cent at $22.9 per ounce.

US dollar rate in focus

Speaking on the reason for rise in gold rate today, Anuj Gupta, Vice President — Research at IIFL Securities said, "Gold prices are rising today on US Fed rate hike that pulled down US dollar rates to 7-week lows. In fact Dollar Index has lost the psychological 102 levels and now it is close to its support placed at 100. On breaching this level, we can witness some more rise in the gold prices in medium to long term."

On why US dollar rates tumbled, Marc Despallieres, Chief Strategy and Trading Officer at Vantage said, "The US Dollar slumped to a near seven-week low on Wednesday after the Federal Reserve hiked interest rates as expected. But a change in the bank’s language signaled a potential policy shift, which could see the bank hit its terminal rate sooner than expected."

Highlighting the pivot levels in regard to gold prices in near term, Anuj Gupta said, "Gold prices have immediate support placed at $1,950 whereas its major support is placed at $1,920 per ounce levels. On the upper side, it is facing immediate resistance at $1,980 levels and on breaching this level, the precious yellow metal may touch $2,010 per ounce levels."

Gold price outlook

Expecting pressure on higher levels, Praveen Singh, AVP, Fundamental currencies and commodities analyst at Sharekhan by BNP Paribas said, "While lingering credit concerns may continue to support gold prices in near term, the yellow metal may not rally much from the current level on a sustainable basis. Gold is expected to gravitate slowly lower back to $1850-$1875 in coming months as the Federal Reserve pivot expectations are misplaced. Inflation control continues to be the Federal Reserve's and other major central banks priority."

On how US Fed rate hike would impact gold price today, market expert Sugandha Sachdeva said, "Gold and silver are likely to perk up in today's opening trades on the back of weakness in the dollar index as the US Fed at its highly anticipated meeting delivered a 25bps rate hike in line with market expectations. However, the US central bank has left the door open for further increases in borrowing costs and gave no indications about a rate cut later this year which the market participants were forecasting ahead of the meeting. This can cap gold prices at higher levels where a near-term hurdle is visible at 59,200/10gm mark or $1,980 per ounce mark, while silver prices will find resistance at 70,500/kg mark. Downside support for gold is seen at 58,500/10gm and then 58,000 per 10gm mark corresponding to $1,910 per ounce."

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before taking any investment decisions.

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ABOUT THE AUTHOR
Asit Manohar
Chief Content Producer at Live Mint Digital Team
Catch all the Commodity News and Updates on Live Mint. Download The Mint News App to get Daily Market Updates & Live Business News.
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Published: 23 Mar 2023, 09:28 AM IST
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