Gold prices fell sharply in early morning trading ahead of today's US Federal Reserve meeting. The gold future contract for December 2023 expiry on the Multi Commodity Exchange (MCX) opened lower at 61,117 per 10 gm levels. After plunging to an intraday low of 61,110 just minutes after the commodity market began today, the MCX gold rate recovered and hit an intraday high of 61,199 per 10 gm. The global spot gold price is currently about $1,992 per ounce.
Similarly, on the MCX today, silver opened at 72,492 per kg before falling to an intraday low of 72,433 levels during morning trades. The current worldwide silver price per ounce is $23.15 USD.
Why is the gold price under pressure today?
Anuj Gupta, Head of Commodity & Currency at HDFC Securities, explained why gold and silver prices are under pressure today, saying, "Retracement in gold and silver prices today should be seen as a cool off effect as bullion prices were continuously rising last week." So, rather than any hint of weakness in bullions, it is more of a profit booking ahead of the US Fed meeting."
The focus is on the US Federal Reserve meeting.
Anuj Gupta of HDFC Securities stated of the US Fed meeting, "US Fed is expected to maintain its rate pause stance in its meeting starting today." The comments, on the other hand, will be crucial. In general, the US Federal Reserve does not raise interest rates in December due to the close of the fiscal year. So, if the US Fed does not raise rates at its November meeting, the market expects the US Fed to raise rates only next year. If the US Fed gives such a clue in the outcome of its current FOMC meeting, we can expect a dramatic comeback in gold and silver prices around the world."
Gold and silver prices are expected to recover from support levels. "Gold prices have remained resilient despite a strong US dollar index," said Deveya Gaglani, Research Analyst - Commodities at Axis Securities. Due to geopolitical and economic uncertainty, investors rushed to gold for its safe-haven appeal. Tensions in the Middle East have risen as Israel begins its ground assault in Gaza, causing gold prices to rise."
Is there a chance to buy something for Diwali 2023?
According to Anuj Gupta of HDFC Securities, gold prices in the international market have immediate support at $1,980 per ounce levels, while the MCX gold rate has support at 60,500 levels.
Anuj Gupta stated of starting Diwali 2023 gold and silver purchases, "Wait for the US Fed commentary." If the comments match market expectations and the rate hike is delayed until next week, gold prices may reach 62,000 and 63,000 per 10 grams in the near term."
Will the MCX gold rate reach a new high
According to Anuj Gupta of HDFC Securities, the MCX gold rate reached a new high of 61,845 per 10 gm in May 2023, which remains the current record high. So, if the conclusion of the US Fed meeting matches market forecasts, we can anticipate gold prices to reach a new high by Diwali 2023. "Silver price has support placed at 71,000 and 70,000 per kg levels whereas on the upper side, it is facing resistance at 73,000 and 75,000 per kg levels," Anuj Gupta said.
