The price of gold opened at Rs 61,539 per 10 grams on the Multi Commodity Exchange (MCX) on Thursday, with a low of Rs 61,482. In the global market, gold was around $2,008.34 per troy ounce. Silver started at Rs 71,440 per kg on the MCX, reaching a low of Rs 71,320, and internationally, it was $22.57 per troy ounce.
Manav Modi, who analyzes commodities and currencies at MOFSL, said, “Gold prices dropped to a more than one-month low because strong economic data boosted the dollar and Treasury yields, reducing expectations of a US rate cut in March.”
The metal fell by over 1% in the last session, its biggest one-day drop since December 4, 2023. The US dollar hit a one-month high after strong retail sales data, while yields on the US 10-year Treasury notes also rose.
The dollar index and Treasury yields affected gold prices, which rose after better-than-expected US retail sales data. This data showed that the US economy is strong despite high interest rates, reducing the chance of quick rate cuts by the Federal Reserve.
Deveya Gaglani, a commodities research analyst at Axis Securities, added, “Treasury yields rose after the data, with the US two-year note paying 4.359%, up 13.5 basis points, and the 10-year note up 4.2 basis points to 4.109%. We expect the gold price to trade negatively as long as it stays below $2050.”
US retail sales surpassed expectations in December, indicating a strong economy in the new year. US industrial production also beat expectations, affecting safe-haven assets. Earlier this week, Fed official Waller said the central bank shouldn’t rush to cut rates until lower inflation is sustained.
Modi also said, “Bets for a pause in the March Fed meeting are increasing, instead of the expected rate cut. Today's focus will be on the Philly Fed manufacturing index and US weekly jobless claims data.”
Gaglani suggested, "Gold prices have been under selling pressure for the past weeks."
Amit Khare, Associate Vice President at GCL Broking, shared, “MCX gold and silver closed negatively yesterday. According to the daily chart, bullions are trading near an important support zone; Gold February Support is at 61400/61200 and Resistance at 61800/62000."
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