Gold rate today opened higher and tested ₹61,000 per 10 gm levels in early morning deals on Multi Commodity Exchange (MCX). The gold price has been rising after the US Fed’s rate hike announcement by 25 bps on Wednesday. After this outcome of US Fed meeting on the expected lines of the market observers, gold price climbed to a new peak of $2081.80 per ounce in international spot market on Wednesday whereas MCX gold price is quite close to its life-time high of ₹61,371 per 10 gm as it has made an intraday high of ₹61,319 per 10 gm within few minutes of commodity market’s opening bell today.
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Speaking on reason for rise in gold price today, Anuj Gupta, Vice President — Research at IIFL Securities said, “Gold prices are rising due to weakness in the US dollar after US Fed rate hike. Even though US Fed’s rate hike of 25 bps is on the expected lines of the market observers, but the inflation is much above the comfort zone of the US Central Bank. This has put US dollar under pressure and the Dollar Index has hit one month low after this US Fed news.”
US dollar under pressure
On why gold and silver prices are rising despite US Fed rate hike being on the expected lines, Amit Sajeja, Vice President — Research at Motilal Oswal said, “Both gold and silver rates today are in uptrend as US Fed’s wording suggest that there will be possible pause in interest rate hike and it has put US dollar under pressure. Rally in gold and silver rates today is because of weakness in the US dollar against major global currencies.”
Expecting weakness in US dollar to further continue, Anuj Gupta of IIFL Securities said, “Dollar Index has immediate support placed at 100 levels. On breaching this level, we may expect Dollar Index to go down towards 98 levels in near term.”
Gold, silver price outlook
On outlook for gold in near term, market expert Sugandha Sachdeva said, “Gold looks to continue on the upwards terrain as the Fed hiked rates on expected lines by 25 bps and also softened its tone for further rate hikes. This has supressed the dollar index and is favoring the outlook for gold. The precious metal looks headed towards ₹61,700 per 10 gm mark in the near term, once it breaches the previous high of ₹61,371 per 10 gm, while support is seen at ₹60,500 per 10 gm.”
On whether gold and silver would be able to climb to a new peak, Amit Sajeja of Motilal Oswal said, “In near term, MCX gold price is expected to go up to ₹62,200 per 10 gm levels breaching its current life-time high of ₹61,371 while silver prices are also expected to go up to ₹78,500 per kg levels, climbing a new peak.”
