Gold Rate Today: On Wednesday, January 31, the domestic futures market saw a lackluster morning session for gold as investors awaited the US Federal Reserve’s impending decision and muted global cues. Further pressure on gold prices was also applied by the dollar index’s appreciation.
Due to investors’ tempered bets on swift and significant rate cuts in the US due to the robust US economy and the anticipation of remarks from the Federal Reserve later in the day, gold prices on Wednesday were headed for their first monthly decline in four. With a gain of more than 2% in January, the dollar index was poised to record its best month since September, according to Reuters.
The yellow metal is seeing sluggish buying as hopes for an early rate cut by the US Federal Reserve diminish. Gold is frequently regarded as a safe-haven asset, and during periods of low interest rates, geopolitical unrest, and economic uncertainty, its value typically rises.
As long as the Israel-Hamas conflict continues, there is increasing hope for a possible a ceasefire. On the macroeconomic front, the US economy is still strong at the same time, which makes it less likely that the US Federal Reserve will start cutting interest rates as early as March. The prices of gold may decline as a result of these factors working together.
From bets of more than 160 basis points (bps) at the end of 2023, traders are pricing in about 130 bps of Fed rate cuts for 2024, according to LSEG’s interest rate probability app IRPR. According to Reuters, the likelihood of a rate cut in March has decreased from roughly 90% to 44%.
What gold strategy should you employ today?
Analysts anticipate that gold prices will continue to fluctuate this week in response to changes in the dollar index and the FOMC decision.
Prithvifinmart Commodity Research’s Manoj Kumar Jain predicts that this week’s gold and silver prices will continue to fluctuate due to changes in the dollar index and the results of the FOMC meeting.
According to Jain, the closing prices of gold and silver are $2,000 and $22, respectively, and these levels are important support levels that the metals may hold. Any price declines during today’s session would present a chance to purchase gold and silver.
“Gold has support at $2,038-2,026, while resistance at $2,062-2,076 per troy ounce and silver has support at $23-22.84, while resistance is at $23.50-23.80 per troy ounce in today’s session,” Jain told Reuters.
“On the MCX, gold has support at ₹62,300-62,080 and resistance at ₹62,620-62,800 while silver has support at ₹72,000-71,650 and resistance at ₹72,700-73,100,” Jain told Reuters.
He recommends purchasing silver at ₹72,000 with a stop loss of ₹71,650 for a target of ₹73,100.
Rahul Kalantri, VP of commodities at Mehta Equities, expects gold and silver prices to remain volatile this week due to dollar index fluctuations and the upcoming FOMC meeting results.
“Technically, gold finds support in the $2,020-2,008 range, with resistance at $2,045-2,061.” Kalantri said that silver has support at $22.88-22.70 and resistance at $23.25-23.38.
The Indian rupee supports gold at ₹62,440-62,270, while resistance is at ₹62,810 and ₹62,980. Silver’s support levels are ₹71,740-71,080, with resistance at ₹72,950 and ₹73,380, according to Kalantri.
