Gold falls on Fed concerns

Following hawkish signals from Federal Reserve officials reaffirming their commitment to reduce inflation with further rate hikes, gold fell below $1,860 an ounce on Friday and was expected to decline for a second week. consecutive.

These events followed the release of better-than-expected US jobs numbers, which may have an impact on consumer spending and the rate of inflation. Investors are now looking for clues about the course of the Fed’s tightening in an additional Fed speech, US consumer confidence data to be released on Friday, and US inflation data. which will be published the following week.

As rising interest rates increase the opportunity cost of owning non-yielding bullion and vice versa, gold is particularly sensitive to rate forecasts. With the likelihood of further interest rate hikes from the US Federal Reserve, gold prices were little changed on Friday in international markets and were on track for their second straight weekly loss.

Spot gold was unchanged at $1,861.11 per ounce. The metal is down 0.2 percent so far this week. US gold futures fell 0.3% to $1,873. Silver was trading marginally lower, 0.98 percent, at Rs 66,374 per kilogram, while gold was trading 0.52 percent lower at Rs 56,555 per 10 grams, on the Multi Commodity Exchange (MCX ).

A steady stream of central bankers calling for future tightening has kept COMEX gold prices near a one-month low of $1,870 a troy ounce, and they are on track for a small weekly decline. As investors processed the latest data, particularly the health of the labor market, market expectations that US interest rates will peak in July rose slightly.

Sell ​​gold today as prices rise around Rs 57,100

Fed funds are currently expected to peak at 5.15 percent in July, up from 4.9 percent seen before the US jobs report, according to interest rate futures. The 10-year yield rose to 3.66 percent as US Treasury yields reversed early losses and rose along the curve. The non-yielding yellow metal has lost some of its luster as a result of the recent increase in yields. The US CPI figures, due to be released next week, can now be brought into focus to predict the Fed’s future course of action.

On February 9, gold prices were falling, with Comex Gold fluctuating between $1,889.93 and $1,862.21 and MCX Gold fluctuating between Rs 57,419 and Rs 56,835. After its lows of 102.51, the dollar index gradually rose. On February 9, the Labor Department released data on unemployment claims that revealed that more Americans than anticipated had filed new claims for unemployment benefits in the previous week. According to figures from the State Administration of Foreign Exchange, China’s gold reserves rose to 65.12 million ounces at the end of January, an increase of 480,000 ounces from the end of December 2022.

Traders will be watching today’s Consumer Sentiment data and, more significantly, inflation data released the following week. Gold’s immediate MCX resistance is at Rs 57,200 and its immediate support is near Rs 56,300. On the Comex, the nearest areas of $1875 and $1835, respectively, represent imminent resistance and support.