Gold rate today steady below $2000 on US dollar pullback from seven-week high. Buy, hold or exit?

Gold rates today steadied below the psychological $2,000 per ounce levels as the US dollar pulled back marginally from its seven-week high during early morning deals. Amid traders and investors focus on US debt ceiling crisis, gold future contract on Multi Commodity Exchange (MCX) for June 2023 expiry opened lower and went on to hit intraday low of ₹60,049 per 10 gm levels. However, in international market, gold price today sustained above the psychological $1,980 levels and made an intraday high of $1,986 after hitting intraday low of $1,980.54 per ounce within few minutes of Asian stock market's opening bell today.

Likewise, silver rate today steadied below $24 per ounce amid US debt ceiling negotiations. Silver future contract for May 2023 expiry on MCX opened lower and went on to hit intraday low of ₹72,481 per kg whereas it made intraday high of ₹72,557 levels. Silver price on MCX had ended at ₹72,658 per kg levels. In international market, silver price opened below $24 levels at $23.736 per ounce and went on to hit intraday low of $23.670 levels whereas its intraday high stood at $23.780 levels.

Gold price could remain in the $1,965-$2,020 range over the next two weeks, but the general trend remains fairly weak, as increasing optimism around the debt ceiling is also likely to heap pressure on bullion, said Edward Meir, metals analyst at Marex.

Why gold price is falling?

"Gold prices have fallen below $2,000 levels after rise in US dollar to seven week high on speculations about US Fed's interest rate cut this year. After better than expected US inflation and other economic date, market is expecting that US Fed will not pause interest rate and instead the US central bank may for for a possible interest rate cut," said Anuj Gupta, Vice President — Research at IIFL Securities.

Gold price outlook

Expecting further downside in gold prices, Deveya Gaglani, Research Analyst - Commodities at Axis Securities said, “Detailed analysis of the daily chart indicates that the precious metal is trading below the critical 20-day and 9-day Exponential Moving Averages (EMA), indicating a well-established downtrend. Furthermore, the Relative Strength Index (RSI) is below its reference line, which is a strong negative signal for gold prices. Unless the key resistance level of 60550 is convincingly breached, we anticipate that the bias for gold prices will remain tilted toward the downside.”

For high risk traders, Anuj Gupta said that gold price today on MCX has strong support placed at ₹59,500 and hence one can by gold at around ₹59,900 levels for a possible short term target of ₹60,400 per 10 gm maintaining stop loss loss at ₹59,500 levels.

Silver price outlook

On advice to those who want to invest in silver, Anuj Gupta of IIFL Securities said, "Those who want to invest in white metal, they can buy the precious metal at ₹72,000 levels for short term target of ₹73,100 per kg levels." However, Anuj Gupta strictly recommended silver investors to maintain stop loss at ₹71,500 per kg levels.

Silver rate today has immediate support placed at $23 per ounce levels in international market, Anuj Gupta of IIFL Securities said.

Markets are currently pricing in a 76.2 per cent chance of the US Fed holding interest rates at the current level in June, according to the CME FedWatch tool. Rising interest rates dull non-yielding bullion's appeal.

(With inputs from Reuters)

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