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Gold Price Today, 28 Sep 2022: Gold, silver rates fall on strong US Dollar, weak cues; MCX support at Rs 48500

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Gold Price Today, Gold Price Outlook, Gold Price Forecast: Gold rate and silver rate were trading weak on Wednesday, on the back of strong US Dollar. On Multi Commodity Exchange, gold October futures were trading Rs 99 or 0.2 per cent down at Rs 49,220 per 10 gram. Silver December futures were ruling Rs 581 or 1.05 per cent down at Rs 54,798 per kg. Globally, yellow metal prices slipped as the dollar resumed climbing after Federal Reserve officials reiterated the US central bank’s resolution to maintain an aggressive policy stance to tackle soaring inflation, according to Reuters. Spot gold was down 0.3% at $1,624.81 per ounce, U.S. gold futures dipped 0.2% to $1,632.4.

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MCX Gold October erased gains seen in early trade yesterday as the greenback continued to stay firm while upside remained limited in the precious metals complex. However, depreciation in rupee could continue to aid downside in domestic front MCX gold futures. The outlook is bearish. COMEX Gold has a strong support near $1,620 an ounce. Overall MCX Gold could continue to trade lower to Rs. 49,100 – 49,000 per 10 gm in October contract.

Bhavik Patel, Commodity & Currency analyst, Tradebulls Securities

The US Treasury yield hit 4.00% yesterday which strengthened the US Dollar and weakened all asset classes including gold. Bearish sentiment in the gold market has reached a four-year high. Money managers have dropped their speculative long position and added fresh short positions. Gold’s net short positioning increased to 36,695, doubling from the previous week. We have seen six weeks of outflow from Gold ETF on account of strong dollar. Initially gold was able to withstand the hawkish Fed but continuous rallies in the US dollar have put gold on back foot. Investors should wait for some stabilization in the marketplace. There is now risk of short squeeze building up so any trader holding a short position should hold with strict stoploss. $1600 continues to be strong support and breach below that would break the prices till $1540. In MCX, weak rupee is helping gold and next support comes at 48800-48500.

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Navneet Damani, Sr. Vice President – Commodity & Currency Research, Motilal Oswal Financial Services

After a slight rebound earlier this week, both gold and silver prices witnessed some pressure as the Dollar Index gained momentum once again amidst hawkish speech from fed officials. Minneapolis Federal Reserve Bank President Neel Kashkari said U.S. central bankers are united in their determination to do what is needed to bring inflation down, and financial markets understand that. Meanwhile, Chicago Fed President Charles Evans said the central bank will need to raise interest rates to a range between 4.50% and 4.75%. Market participants are expecting the Fed to maintain its hawkish stance, raising expectations of further aggressive rate hikes. These expectations are supporting the move in Dollar Index and U.S. Yields which is currently trading ~114.40 and 3.9% respectively, weighing on the precious metals pack. New orders for U.S. manufactured capital goods increased more than expected in August, suggesting that businesses remained keen to invest in equipment despite higher interest rates, which could keep the economy on a moderate growth path. Focus today will be on the comments from the Fed and ECB Governor. Broader trend on COMEX could be in the range of $1610-1657 and on domestic front prices could hover in the range of Rs 48,850-49,550.

(The views in this story are expressed by the respective experts of the research and brokerage firm. Financial Express Online does not bear any responsibility for their advice. Please consult your investment advisor before investing.)

MCX Gold prices to consolidate next week, support seen at Rs 48,900; buy on dips as recession fears persist

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By Bhavik Patel

It was a volatile market for gold this week as we had seen some very heavy moves in the currency market. Last week GBP was getting rattled after unveiling a mini budget which shot US dollar into the sky and the outcome was a blanket selling of all asset classes. While struggling against the U.S. dollar, the gold market is trading near all-time highs against all three major currencies namely Euro, Yen and Pound. Gold was trading at a 2.5 year low this week after which there was intervention from the Bank of England to keep their currency from collapsing in the way of buying long dated British bonds.  

Gold prices welcomed the BOE’s dramatic intervention that avoided an imminent gilt crash and sent global bond yields sharply lower. This was somewhat expected and serves as a reminder that gold will do just fine once the global bond market selloff is truly over. However gold is not out of the woods as rates markets are pricing the potential for higher interest rates to persist for some time, and a steady stream of Fedspeak is likely to hammer this point home. This means the US dollar will continue to remain stronger creating headwinds for gold prices. US greenback has rallied 7% over the last 12 days, which could signify a technical blow-off top. What we are seeing right now is just that as an overstretched rally needs to cool down.

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Historically, when the U.S. dollar has peaked, gold prices have rallied around 6% in the subsequent two months. It is difficult to say whether the US dollar has peaked or not at the moment but from a structural perspective, technically and given historical context, the US dollar is nearer the top and Gold is getting nearer its floor. Growing stress in currency markets could force the Federal Reserve to take a less aggressive stance at its November meeting.

For the moment, 48900 in MCX is the immediate support as twice the market has bounced from that level. In COMEX, $1600 seems to be support for now and if that breaches, then we may see levels till $1540. On the upside, 50800 and 51500 seems to be the resistance. For next week, we continue to advocate buy on dips as the US dollar rally seems to run out of steam temporarily and with risk aversion and recession fear, we might see safe haven buying. Long position can be held with stoploss of 48900 in MCX. Next week we don’t expect any major moves barring Friday when US non-farm payroll data will be released. After such a volatile week we expect prices to consolidate next week.

(Bhavik Patel is a commodity and currency analyst at Tradebulls Securities. Views expressed are the author’s own.)