Gold rate today: Yellow metal trades flat near ₹69,000 per 10 grams as dollar strengthens. Should you buy?

Gold rate today: Gold prices on MCX traded flat on Wednesday tracking weakness in international bullion prices amid a rise in US dollar and Treasury yields.

MCX gold rate gained 0.05% to ₹68,999 per 10 grams, while MCX silver prices traded 0.26% higher at ₹79,827 per kg. Gold prices opened higher at ₹69,440 level as against previous close of ₹68,965.

In the international markets, spot gold declined 0.2% to $2,385.60 per ounce, while the US gold futures fell 0.3% to $2,425.30. Spot silver edged 0.1% higher to $27.0561 per ounce.

Analysts believe the ongoing geopolitical tensions in the Middle East and lingering global recession concerns may limit the downside in gold rate.

“MCX Gold October futures, so far in the week, is down by 1.35% amid selloff in the international market. Nonetheless, downside in gold may be limited by ongoing Middle East tensions and lingering global recession concerns. The so-called safe haven holding at the SPDR Gold ETF has grown slowly to 848 tonnes as of August 6 as compared to 815 tonnes as on March 8,” said Jigar Trivedi, Senior Research Analyst - Currencies & Commodities at Reliance Securities.

The dollar index rose to 103.25, making the greenback-priced bullion less affordable for overseas buyers.

Traders have altered their rate cut expectations following the soft jobs report last week, with nearly 105 basis points of cuts anticipated by year-end, Reuters reported. However, markets are also pricing in a 65% chance of the Fed cutting rates by 50 bps in September, CME FedWatch tool showed, compared with 85% a day ago.

“The US dollar appreciated for the second session as trades dialed back bets on an emergency cut by the Fed. Moreover, in the last three sessions, the US 10 year treasury yield too rebounded to 3.91% from 3.66%. A rebound in the yield and a firmed US dollar translates into the downward pressure on the yellow metal,” Trivedi said.

Technical View

Technically, according to Trivedi, comex gold has a strong support of 100 simple DEMA around $2,346 per ounce, while MCX Gold October may rise to ₹69,100 per 10 grams in the intraday session.

Rahul Kalantri, VP Commodities, Mehta Equities Ltd noted that the market participants were awaiting signals regarding the extent to which the Federal Reserve will reduce interest rates this year.

“Gold has support at $2,365 - $2,350 and resistance at $2,404 - $2,422. Silver has support at $26.72 - $26.50 and resistance at $27.15 - $27.34. In INR, gold rate has support at ₹68,780 - ₹68,550 and resistance at ₹69,310 - ₹69,540. Silver has support at ₹79,050 - ₹78,450 and resistance at ₹80,290 - ₹80,840,” Kalantri said.

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 making any investment decisions.