Gold price today marginally higher, support for yellow metal at ₹55,500

In India, MCX Gold Futures for April contract fell by 0.30% to crack below ₹56,000 per 10 grams.

“Gold price in international market breached its immediate support of $1,830 per ounce in early morning session and now it has support placed at $1,800 levels. On the upper side, gold prices have resistance placed at $1,890 and $1,920 per ounce levels. However, I am expecting some relief rally in gold as US dollar has witnessed some profit booking at higher levels. In domestic market, one can sell gold at ₹56,300 for near term target of 55,800 per 10 gm levels maintaining stop loss at ₹56,650 per 10 gm levels,” said Anuj Gupta, Vice President — Research at IIFL Securities.

There are many factors playing for the gold market at present – while the geopolitical tensions between Russia-Ukraine increase the appeal of the precious metal, the weakness in dollar and high interest rates scenario keep the gains capped.

Elevated interest rates dampen gold’s appeal as an inflation hedge while raising the opportunity cost of holding the non-yielding asset.

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“Gold prices are likely to remain inclined on a downward trajectory following the recent hawkish remarks from Fed officials and further advances in the US dollar. Meanwhile, minutes of the Fed’s last meeting indicated that most of the policymakers favour further hikes in borrowing costs in coming months to beat inflation, which suppressed international gold prices during the overnight session. Markets are now eyeing another reading of the fourth quarter US GDP and Fed’s favored inflation measure-the core personal consumption expenditure index. That will provide further cues about the inflationary trends in the US economy,” said Market expert Sugandha Sachdeva.

“Price set up for the precious metal suggests near-term resistance at Rs.56500 per 10gm mark, while immediate support resides at Rs.55500 per 10gm mark. Any violation of the mentioned support would lead to a further cut in gold prices. Having said that, simmering geo-political tensions associated with Russia’s war in Ukraine are largely underpinning the precious metal owing to its safe-haven appeal and market participants should keep a close tab on the latest developments as they can influence gold prices in a significant manner,” she said.

Minutes from the Federal Reserve’s latest policy meeting showed on Wednesday policymakers agreed rates would need to move higher, but that the shift to smaller-sized hikes would let them calibrate more closely with incoming data.

The dollar index eased 0.2%, making bullion cheaper for buyers holding other currencies. Benchmark U.S. 10-year Treasury yields slipped from a three-month peak hit on Wednesday.

(With inputs from Reuters)