Gold rate today: Gold October futures contracts at MCX reached a new all-time high of Rs 76,000 per 10 grams on Wednesday. Over the past week, gold prices have risen by Rs 2,900 per 10 grams, following the US Fed’s decision to cut rates by 50 bps.
In contrast, silver December futures contracts were trading at Rs 92,221/kg, a decrease of 0.19% or Rs 172. However, silver has also seen significant gains over the past week, increasing by Rs 3,900/kg.
According to an ET report, Anuj Gupta of HDFC securities attributed the record-high gold prices to “persistent optimism over U.S.interest rate cuts” and the Chinese government’s announcement of “a barrage of stimulus measures, raising hopes of an economic recovery.”
“Another fresh reason is that the Chinese government announced a barrage of stimulus measures, raising hopes of an economic recovery,” said Anuj Gupta of HDFC securities.
The Federal Reserve’s substantial rate cut of 50 bps last week, along with concerns about further weakening in the labor market and a revised dot plot, increased the likelihood of additional cuts, providing more upside potential for gold.
Manav Modi, Senior Analyst, Commodity Research at Motilal Oswal, noted that “preliminary manufacturing PMI numbers were reported lower than estimates in major economies. US consumer confidence data was also reported lower at 97 v/s expectations of 103.9 supporting the rally in bullion.”
Several Fed officials expressed support for the bank’s recent 50 bps cut but anticipated a slower pace of cuts in the coming months. With Governor Powell and more than nine other Fed officials scheduled to speak this week, any change in tone from the recent Fed meeting could lead to price volatility, according to Modi.
The US Dollar Index (DXY) was trading near 100.28, experiencing a decline of 10.19 or 0.19% today.
Tensions in the Middle East have escalated between Hezbollah and Israel. Hezbollah confirmed that Israel had targeted and killed Ibrahim Qobeissi, one of its top commanders, in an air strike that shook the southern suburbs of Beirut.
According to Modi, further escalation and updates on the situation could potentially increase the safe haven appeal of gold and silver prices.
“The daily chart of MCX Gold October futures reveals a robust uptrend, with prices moving above an ascending trendline and consistently forming higher highs and higher lows. A bullish engulfing candlestick pattern has emerged, signaling continued bullish momentum. The price is also trading above the 21-day Exponential Moving Average (EMA), highlighting the ongoing upward trend. Additionally, the RSI shows positive divergence, reinforcing the bullish outlook. Key resistance levels are located at 75,500 and 75,700, while important support zones are marked at 74,730 and 74,440,” said Neha Qureshi, Senior Technical & Derivative Analyst, Anand Rathi Commodities & Currencies.
Neha Qureshi suggests the following intraday trading strategy:
* Buy MCX October gold futures at Rs 75,000 with a stop loss of Rs 74,700 and a price target of Rs 75,500
* Buy MCX December silver futures at Rs 92,400 with a stop loss of Rs 91,000 and a price target of Rs 95,000