Business News/ Markets / Commodities/  Gold price today: Rates inch up in early trade; what should be your strategy? Here's what experts say

Gold price today: Rates inch up in early trade; what should be your strategy? Here's what experts say

Gold prices have been volatile of late due to dollar's rise and the ongling debt ceiling crisis in the US. Expertds expec the yellow metal to remain rangebound in the short term.

The dollar index rose against a basket of peers which weighed on gold prices.  (AP Photo/Newmont Mining, file) (Agencies)Premium
The dollar index rose against a basket of peers which weighed on gold prices. (AP Photo/Newmont Mining, file) (Agencies)

Gold prices traded with nominal gains in the early trade in the domestic futures market on Wednesday (May 24) tracking weak global cues as market sentiment remained fragile due to the US debt ceiling crisis. Investors also awaited FOMC meeting minutes, scheduled for later today, to get a cue on the rate hike trajectory.

In international markets, gold prices traded rangebound after another round of talks on the US debt ceiling ended with no deal. As per Reuters, representatives of US President Joe Biden and congressional Republicans ended another round of debt-ceiling talks without a resolution on Tuesday.

The dollar index rose against a basket of peers which also weighed on gold prices. Recent hawkish comments from one of the US Fed officials on a likely rate hike in 2023 have added strength to the dollar. As gold is a global commodity, valued in the dollar, a rise in the dollar value makes gold expensive in other currencies and hits its demand.

MCX Gold traded 0.07 per cent up at 60,240 per 10 gram around 10 am.

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What should be your strategy?

Analysts believe gold prices may remain volatile for the day but there may not be a sharp downside amid debt ceiling uncertainty. Also, investors await FOMC meeting minutes later today which is expected to give a hint on what Fed thinks about interest rate hikes. Analysts expect gold to trade rangebound at least till clarity emerges on the front of the US debt ceiling. Besides, the next Fed meeting in June is also a crucial factor that will decide gold price movement going ahead.

Rahul Kalantri, VP of Commodities at Mehta Equities underscored that an appreciating US dollar index, that hit a two-month high today, as well as rising US Treasury yields, had kept the gold and silver market under pressure. The US dollar index was higher and hit a two-month high overnight. Meantime, the benchmark 10-year US Treasury note yield is presently fetching a 3.74 per cent restricted upside.

"Chart-based selling is also featured recently as the near-term technical postures for both metals have deteriorated, said Kalantri. However, buying at lower has been seen in the safe-haven gold and silver markets as US debt ceiling negotiations are unable to reach any conclusion," said Kalantri.

"We expect gold and silver to remain volatile in today’s session. Gold has support at $1,960-1,946 while resistance at $1,984-1,996. Silver has support at $23.17-23.05, while resistance is at $23.62-23.82. In the Indian rupee terms, gold has support at 59,950-59,740, while resistance is at 60,480, 60,690. Silver has support at 71,620-70,950, while resistance is at 72,850–73,320," said Kalantri.

Manoj Kumar Jain of Prithvifinmart Commodity Research expects gold and silver prices to remain volatile in today’s session ahead of the FOMC meeting minutes but they could hold their support levels.

"Gold has support at $1,964-1,950, while resistance at $1,988-2,004 per troy ounce. Silver has support at $23.35-23.10, while resistance is at $23.88-24.20 per troy ounce. At MCX, gold is having support at 60,000-59,770 and resistance at 60,440-60,660 while silver is having support at 71,660-71,100 and resistance at 72,750-73,200," said Jain.

Ravindra V. Rao, CMT, EPAT, VP-Head Commodity Research at Kotak Securities believes the yellow metal might stay buoyed for the day amid debt ceiling uncertainty and as investors await the FOMC meeting minutes later today, which is expected to signal a June pause and a slightly dovish picture, citing economic headwinds.

Brokerage firm Motilal Oswal Financial Services expects MCX Gold to trade rangebound for the session, with support in the range of 60,000-59,800 and resistance at 60,490-60,740.

As per brokerage firm SMC Global Securities, gold may witness buying and trade in the range of 59,900-60,300.

Disclaimer: The views and recommendations given in this article are those of individual analysts and brokerage firms. These do not represent the views of Mint. We advise investors to check with certified experts before taking any investment decisions.

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Updated: 24 May 2023, 10:16 AM IST
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