Gold prices moved higher on Thursday to touch an all-time high after the Federal Reserve raised interest rates by an expected 25 basis points and Fed Chair Jerome Powell’s comments were read as dovish by the market. On Thursday, gold prices rose 1.33% or Rs 775 to trade at Rs 58,660 on .
Analysts also attribute the rise in gold prices to fresh positions built up by participants.
In the international markets, spot gold was at $1,951.79 per ounce after hitting its highest since April 2022 earlier in the session. U.S. gold futures rose 1.3% to $1,967.40.
The dollar index fell 0.3%, making bullion cheaper for holders of foreign currency. The index is currently hovering marginally above 100.9 levels.
“Gold and silver traded sharply higher in the domestic markets post the Union Budget announcement, where import duty on gold remained unchanged while an increase in import duty on silver was affected. In the international markets, both the bullions logged gains and closed at their daily highs in view of a slight increase in the interest rate by the Federal Reserve that was widely expected.,” said Rahul Kalantri, VP-Commodities, Mehta Equities.
“We expect gold and silver to remain volatile in today’s session. Gold has support at $1938-1926 while resistance is at $1962-1974. Silver has support at $23.98-23.72, while resistance is at $24.42-24.60,” Mehta said.
Investors also tracked US Fed 25 bps interest rate hike, which boosted the safe-haven bullion’s appeal. Going forwards, traders will focus on economic data and Fed officials’ comments for further direction.Ravindra V. Rao, VP-Head Commodity Research at Kotak Securities said, “On the price front, the bearish engulf formation has negated as the price moved above the pattern high before confirmation. Now the price has to sustain above the $1967/oz resistance and if that happens the bulls might target the psychological $2000/oz.”
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Gold tends to benefit in a lower interest rate environment, as it reduces the opportunity cost of holding non-yielding bullion. If there are more signs of a slowdown in the US economy and the Fed continues to lower rates, then investor demand for gold will rise.
Meanwhile, the Bank of England and the European Central Bank are expected to raise rates by 50 bps later in the day.
Elsewhere, spot silver gained 0.8% to $24.17 per ounce, scaling a one-week high. Platinum rose 0.6% to $1,009.69 while palladium edged down 0.2% to $1,665.82.
(With inputs from agencies)
(Disclaimer: Recommendations, suggestions, views, and opinions given by the experts are their own. These do not represent the views of Economic Times)
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