Gold price rallies on Israel-Hamas war, weak US dollar, US Fed rate pause buzz
NEW DELHI (October 21) On account of rising tension in the Middle East region on Israel-Hamas war, US Fed's hint for a possible rate pause in upcoming US Fed meeting in November 2023 and slide in US dollar aided gold price to continue its rally and climb to around four month high on Multi Commodity Exchange (MCX). MCX gold rate logged weekly gain of 2.15 per cent and ended at ₹60,725 per 10 gm levels. In international market, spot fold price registered 2.49 per cent weekly gain in the week gone by and finished at $1,980.90 per ounce levels.
Likewise, MCX silver rates scaled 2.07 per cent last week and finished at ₹72,915 per kg levels. MCX silver price ascended ₹1,299 on Friday session. In international market, silver price registered weekly gain to the tune of around 22.97 per cent.
US Fed news in focus
"After US Fed chief Jerome Powell's hint to keep interest rates unchanged, US dollar has been uncer pressure and US dollar index has come down towards 106 levels after inching close to 107 levels in early last week. so, both US Fed rate pause buzz and US dollar losing sheen against major global currencies have provided support to gold price rally," said Anuj Gupta, Head — Commodity & Currency at HDFC Securities.
Israel news under scanner
pointing towards Israel-Hamas war for recent rally in gold prices, Prithviraj Kothari, National President at India Bullion and Jewellers Association (IBJA) said, "Gold prices have appreciated sharply from ₹56,000 to ₹60,000 in 10 days as an escalation in the Israel-Palestine conflict spurred concerns over a spillover into the broader Middle East region, which in turn fuelled demand for conventional safe havens. Investment demand and Physical Retail Demand is back, supporting the prices. The fundamental and technical landscape has improved with a long-term bullish view. I expect prices to trade at least 10 per cent higher from current levels by next year, so auspicious day like Dusshera is the best time to buy Gold."
US dollar to INR
"We expect Rupee to trade with a slight negative bias as escalating tensions between Hamas and Israel may continue to deteriorate global risk sentiments. US Dollar may bounce back as safe haven demand may come into play and crude oil prices may rise further on concerns over supplies. US 10-year bond yields may are at fresh cyclical highs and is near the psychological resistance of 5% levels. However, any diplomatic efforts to contain the conflict in the Middle East and RBI intervention may support Rupee at lower levels. USDINR spot price is expected to trade in a range of ₹82.80 to ₹83.50," said Anuj Choudhary, Research Analyst at Sharekhan by BNP Paribas.
Important levels to watch
Advising gold and silver investors to know their levels, Anuj Gupta of HDFC Securities said, "MCX gold rates have immediate support placed at ₹60,000 per 10 gm levels whereas it has crucial support now placed at ₹59,000 levels. In international market, gold price today has immediate support at $1,960 per ounce levels whereas it has crucial support placed at $1,935 per ounce levels."
On important levels in regard to silver rate today, Anuj Gupta said, "Silver price today looks positive and it is facing resistance at ₹75,000 per kg levels whereas it is facing crucial resistance at ₹78,000 per kg levels. In international market, it is facing hurdle at $24.50 per ounce levels."
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