Gold prices in India have risen to more than two-year highs, mirroring firm global rates. Gold futures on the MCX were up 0.6% to 55,546 per 10 gramme, while silver futures were up 1.4% to 70,573 per 10gm. In August 2020, gold reached record highs of $56,200.
In global markets, gold rose to a six-month high today, while the dollar index remained stable. A weaker US dollar makes greenback-priced bullion more appealing to foreign buyers. Gold was up 0.8% at $1,838.69 per ounce, while silver was up 1.1% at $24.25.
“The dollar index trend has been weak for three months, and gold prices have taken a better outcome from the falling dollar, with prices rising from 50000 to 55000 in MCX,” said Jateen Trivedi, VP Research Analyst at LKP Securities.
Traders will be looking for minutes from the Fed’s December policy meeting, which are due later this week, for more information on the central bank’s tightening path. After four consecutive 75-bps increases, the Fed raised rates by 50 basis points (bps) in December.
Gold is regarded as a hedge against inflation and economic uncertainty, but rising interest rates raise the opportunity cost of holding gold, which pays no interest.
“2022 has undoubtedly increased market participants’ confidence in gold and silver. Along with Russia-Ukraine tensions, inflationary concerns, and the Covid scare in China, market participants will be burdened by the prospect of slower global growth. Market participants will be paying close attention to major central bankers’ monetary policy stances in the coming months. The market will also be looking at changes in the Dollar Index and Yields. Apart from safe-haven bets, advancements in green technology and increased industrial demand may also continue to support silver prices”, according to Motilal Oswal in a note.
The brokerage has set a target of Rs. 58,000 in gold and Rs. 73,000 in silver for medium to long-term investors, followed by Rs. 82,000 in silver.
“Bullions got off to a good start in 2023. According to technical indicators, bullion market prices may continue to rise. The 20- and 200-day simple moving averages (SMAs) recently crossed bullishly, confirming the positive trend in the short term.
Gold has a support level of $1814-1801 and a resistance level of $1838-1850. Silver has a support level of $23.72-23.55, and a resistance level of $24.22-24.40. In rupee terms, gold has a support range of Rs54,950-53,750 and a resistance range of Rs55,480-54,650. Silver has a support level of Rs69,050-68,580 and a resistance level of Rs70,420-70,780, according to Rahul Kalantri, VP of Commodities at Mehta Equities Ltd.