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Gold rate today: After soft US CPI data and dollar index sliding to 7-month low, gold future contract on Multi Commodity Exchange (MCX) for February 2023 breached its previous high of 56,191 per 10 gm and hit new high of 56,245 in early morning deals on Friday. However, buying on higher levels continued and gold prices on MCX once again surged and made new highs of 56,260 and 56,370 per 10 gm on the weekend session.

On MCX, gold rates finally ended at 56,341 levels, logging around 1.10 per cent rise in domestic market on weekly basis. However, in international market, gold prices surged around 2.95 per cent in the week gone by and closed at $1,920 per ounce levels.

According to commodity market experts, gold rates are ascending across globe after soft US CPI (Consumer Price Index) data, which pulled down dollar index towards 7-month low. Experts went on to add that the US inflation growth for December 2022 logged smallest annual growth since October 2021, which fueled speculation about US Fed slowing down its stance on interest rate hike. This also pushed gold price rally on the weekend session. They went on to add that if gold price sustains above 55,600 then we may see next round of appreciation in the yellow metal and MCX gold rates may go up to 57,700 levels in this next round of gold price rally.

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On why gold prices are rising continuously, market expert Sugandha Sachdeva said, "The secular focus of the week was on the US CPI data, where soft inflation data boosted sentiments in the markets while driving the dollar index lower by around 1.67 percent for the week. The US annual inflation rose by 6.5 percent in December, the smallest annual rate of increase since October 2021 and down from a 7.1 per cent rise in November. With inflation trending lower for the sixth month in a row, the Fed is expected to slow the pace of its tightening campaign, a factor supportive of the non-interest-bearing asset-gold."

US Fed interest rate hike

Expecting the US Fed to soften stance on interest rate hike, Nirpendra Yadav, Senior Commodity Research Analyst at Swastika Investmart said, "According to the CME Group Fed Watch tool, there is a 95 per cent chance that the US Fed will raise interest rates by 0.25 per cent at its next meeting. The hope of softening interest rates in the USA and the start of economic activities in China are increasing the demand for crude oil, due to which its prices are witnessing a rise, which is supporting the precious metals."

Dollar index under pressure

"After positive US CPI data signalled the slow increase in interest rates by the Federal reserve. Dollar index is also trading at 7 month low levels which is positive for the gold prices," said Anuj Gupta, Vice President — Research at IIFL Securities, adding, "The the trend of gold and silver are positive as both are following higher top higher bottom formation."

Pivot levels for gold, silver price

On major levels that gold and silver investor should keep in mind, Anuj Gupta of IIFL Securities said, "For the coming week gold has a strong support at 55,700 ($1890) levels and then 55,200 ($1850) levels while resistance at 56,600 ($1930) levels and then 57,000 ($1960) levels. Silver has a strong support at 67,500 levels and then 66,000 levels while resistance at 70,500 levels and then at 72,000 levels."

Speaking on gold price outlook, market expert Sugandha Sachdeva said, "Prices have breached the previous record high of Rs.56191 per 10gm marked in August 2020, but we need to see follow-through buying at higher levels to see whether prices can continue their momentum in the near term. If prices manage to hold above 55,600 per 10 gm mark, they seem to extend their march towards higher levels of around 57,700 per 10 gm in the coming days, else one should brace for some profit booking towards its support pegged at 54,500 per 10 gm."

Sugandha went on to add that in the international markets, the $1920-1925 per ounce zone remains a near-term barrier for gold, while a sustained move past the same would allow it to leapfrog toward $1975 per ounce level.

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.

ABOUT THE AUTHOR

Asit Manohar

Chief Content Producer at Live Mint Digital Team
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