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Gold Prices on Budget Day 2022: Fed’s hawkish stance may cap upside gains; volatility on cards
Gold prices were flat on February 1 in the international markets as a weaker dollar countered concerns about potential interest rate hikes, while investors waited for a slew of economic data to gauge the strength of global economies.
At the Multi-Commodity Exchange (MCX), gold contracts were trading marginally lower by 0.03 percent at Rs 47,670 for 10 grams at 9.23am and silver added 0.06 percent to trade at Rs 61,015 a kilogram.
Gold gained ground as the Dollar index retreated from higher levels. However, prices of precious metals remained range-bound due to long week holidays in the Chinese market.
On the Budget day today, selling pressure is likely to be seen in precious metals. Gold has support at Rs 47,400 and below this level, selling momentum may increase and take the prices towards Rs 47,050 levels. It has an immediate resistance at Rs 47,850. Silver has support at Rs 60,000 and fresh selling is expected below this level, said Abhishek Chauhan, Head of Commodity & Currency at Swastika Investmart.
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Manoj Kumar Jain, Prithvi Finmart Commodity Research
Gold and silver prices showed very high volatility on January 31 in the international markets. Both the precious metals settled on a mixed note. Gold February futures contract settled at $1,795 per troy ounce with a gain of 0.27 percent, while silver March futures contract settled at $22.39 per troy ounce with a loss of 0.43 percent.
Finance Minister Nirmala Sitaraman will present the Budget in Parliament today and any proposal to tweak in the import duty could keep both the precious metals volatile. On the other hand, profit-taking in the dollar index could support prices in the international markets.
Gold has support at $1,784-1,772 per troy ounce and resistance at $1,804-1,818 per troy ounce, while silver has support at $22.10-21.84 per troy ounce and resistance at $22.70-23 per troy ounce. At MCX, gold has support at Rs 47,500-47,330 and resistance at Rs 47,770-47,950.
Silver has support at Rs 60,600-60,300 and resistance at Rs 61,500-61,800. We suggest buying silver around Rs 60,800 with a stop loss of Rs 60,300 on a closing basis for target of Rs 61,600.
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Ravindra Rao, CMT, EPAT, VP- Head Commodity Research at Kotak Securities
COMEX gold trades marginally higher near $1,797/oz after a 0.5 percent gain yesterday. Gold has edged up amid retreat in US dollar index from recent highs, mixed economic data and corporate earnings results, increased geopolitical tensions and inflation concerns.
ETF inflows also show buying interest. However, stability in equity market has kept a check on upside. Gold has edged up after taking support near $1780/oz level and may now move towards the key $1,800/oz level. However a sharp upside is unlikely as Fed’s tightening stance may keep US dollar supported.
Vidit Garg, Director, MyGoldKart
Gold was mostly up yesterday as weaker dollar and investors gauge for upcoming economic data’s pushed them to cover their short positions. Investors are now concerned more on real rate of returns beating the inflationary pressures to allocate funds for bullion.
Technically, gold is below 200-day EMA which is placed at $1,802 on the daily charts and multiple resistance lies between $1808$ and $1817 which may come up as spoiler for bulls. Small jobbers can sell spot Gold below $1794.50 for target of $1788 while one can buy above $1802.50 for target of $1808. Union Budget will be presented in Parliament today and any changes in customs duty will bring huge volatility on MCX.
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