Gold rate slips on MCX after US Fed minutes dent rate cut hopes; key levels to watch

Gold rate slipped on the MCX in early deals on Thursday, February 19, amid a stronger dollar after the minutes of the US Fed's last policy meeting showed policymakers are divided over their next step on interest rates.

However, the withdrawal of additional margins on gold and silver supported futures prices.

The MCX and the NSE have withdrawn the extra margin of 3% on gold futures contracts (across all variants) and 7% on silver futures contracts (all variants) with effect from Thursday, February 19.

MCX gold April futures slipped by nearly ₹650, or 0.40%, to ₹1,55,116 per 1 gram, while MCX silver March futures dropped by over ₹1,800, or 0.75%, to ₹2,42,439 per kg.

The dollar index rose to 97.73, hitting its highest level in more than a week, making greenback-backed bullion expensive for buyers in overseas currencies.

The minutes of the US Fed's January meeting showed that officials are divided on the path ahead. Some of them see scope for further easing if inflation cools, while others are ready to tighten policy should price pressures persist.

According to CME's FedWatch Tool, markets now expect three 25-basis-point rate cuts this year.

The focus is on the weekly jobless claims report due later today, the Fed's preferred inflation gauge- the Personal Consumption Expenditure (PCE) data, and the advance GDP estimate for Q4 and full year 2025, due on Friday, for more cues on the central bank's interest rate trajectory.

Short-term demand for precious metals has eased with the Lunar New Year holidays in China, Korea and several other countries, thinning liquidity.

Meanwhile, geopolitical risks around Iran have resurfaced. Media reports suggest a US military action could unfold if further talks fail.

What should investors do?

Manoj Kumar Jain of Prithvifinmart Commodity Research suggests booking profits in long positions at higher levels and avoiding fresh buying until the opening of Chinese markets.

According to Jain, gold has support at $4,964 and $4,915, while resistance is at $5,055 and $5,122 per troy ounce, and silver has support at $74.40 and $72, while resistance is at $80 and $82.40 per troy ounce in today’s session.

On the MCX, gold has support at ₹1,54,400 and ₹1,52,200 and resistance is at ₹1,56,800 and ₹1,59,100, while silver has support at ₹2,38,000 and ₹2,32,800 and resistance is at ₹2,49,000 and ₹2,54,400, said Jain.

Jigar Trivedi, Senior Research Analyst at IndusInd Securities, said MCX gold April futures could drop to ₹1,55,000 per 10 grams as the trend is range-bound. MCX silver March may trade with a positive bias to ₹2,44,000 per kg, and for intraday today, while ₹240,000 per kg is a strong support, said Trivedi.

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Disclaimer: This story is for educational purposes only. The views and recommendations expressed are those of individual analysts or broking firms, not Mint. We advise investors to consult with certified experts before making any investment decisions, as market conditions can change rapidly and circumstances may vary.