Gold prices surge higher ahead of US Fed meet outcome; international spot prices hit 2-week highs

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March 17, 2021 10:08 AM

Gold prices in India were trading higher on Wednesday ahead of the US Federal Reserve meeting outcome. Domestic markets were mirroring the international prices,

gold prices, gold rates, MCX, US fedMeanwhile, a strong US dollar, higher bond yields and signs of a global economic recovery continued to hit the safe-haven demand of precious metals. Image: Reuters

Gold prices in India were trading higher on Wednesday ahead of the US Federal Reserve meeting outcome. Domestic markets were mirroring the international prices, where gold hit a two-week high. On MCX, gold April futures were trading Rs 130 or 0.29 per cent higher at Rs 44,943 per 10 gram against the previous close of Rs 44,813. While silver May futures were ruling at Rs 67,025 per kg, up Rs 106 or 0.16 per cent on the Multi Commodity Exchange. In the previous session, silver futures settled at Rs 66,919 per kg. Meanwhile, a strong US dollar, higher bond yields and signs of a global economic recovery continued to hit the safe-haven demand of precious metals, said an analyst. In August last year, MCX gold hit a record of Rs 56,191 per 10 gram, since then gold prices have been mapping a downward trajectory, falling 20 per cent or Rs 11,248.

Hareesh V, Research Head Commodities at Geojit Financial Services, said that gold prices are required to break the support of $1660 to continue the bearish outlook. Or else, there are chances of a recovery uptick in the counter. Globally, spot gold was up 0.2 per cent at $1,734.00 per ounce, having touched a high of $1,740.90 since March 1. US gold futures were up marginally to $1,731.90. The US dollar gained for the fourth session, supported by
elevated benchmark US Treasury yields on expectations of a strong economic recovery after a $1.9 trillion recovery package was signed into law last week, according to Reuters.

Spot Gold was seen respecting support at $1690, this was associated with oversold crossover in its momentum indicator RSI (14). Rajesh Palviya, Head –Technical & Derivatives Research, Axis Securities Ltd, told Financial Express Online, a rally towards 1750 in short term is expected as concerns on inflation are rising. All traders and investors are focusing on FOMC meeting for projections on 2022 rate hike, GDP forecast and rise in bond yield. “MCX gold is witnessing resistance near 45200 any breakout above this level would pull prices towards 45800 levels in short term (USDINR likely to depreciate as well ),” Rajesh Palviya said. However, a fall below 44600 would negate our bullish view.

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