Daily gold price (Today January 30): Short-term outlook, Forecast and Updates
Gold price falls for 2nd day to Rs 48,800/ 10 gm, silver at Rs 66,000 a kg
Gold price declined further to Rs 48,800 per 10 gm on Friday, extending yesterday's fall. Silver price also fell by Rs 200 to trend at Rs 66,000 per kg, according to the Good Returns website.
Gold jewelry price varies across India, the second-largest consumer of the metal, due to excise duty, state taxes, and making changes.
In New Delhi, the price of 22-carat gold dropped by Rs 100 to Rs 47,800 per 10 gm, while in Chennai it inched up by Rs 50 to Rs 46,220. In Mumbai, the rate dropped to Rs 47,800 according to the website.
The price of 24-carat gold in Chennai was at Rs 50,620 per 10 gm.
In the international market, Gold eased on Thursday as investors opted for the relative shelter of the US dollar from waning risk-on sentiment and after the US Federal Reserve expressed worries over the slow pace of economic recovery.
Spot gold was down 0.2 per cent at $1,840 an ounce by 1258 GMT. Prices had fallen to their lowest since January 18 at $1,830.80 on Wednesday. US gold futures shed 0.3 per cent to $1,838.60.
"The (Fed) meeting yesterday had no positive impact on gold because, before and after the meeting, the dollar strengthened as it was sought after as a safe-haven due to other concerns in financial markets and that weighed on gold prices," said Commerzbank analyst Daniel Briesemann.
The Fed said the pace of the recovery in US economic activity and employment had moderated in recent months, but kept its key interest rates and monthly bond purchases unchanged.
The dollar hovered near a one-week high hit in the previous session after a sharp sell-off on Wall Street on Wednesday and with European equities hitting one-month lows in early Thursday trade.
"If you have a sharp decline in equities, you'd expect gold to come down with it...meaning that quite often people who are looking at the possibility of margin calls raise cash by selling their gold holdings," said StoneX analyst Rhona O'Connell.
The delay in a $1.9 trillion US coronavirus stimulus deal, which has not received a green signal from Republicans, weighed further on gold.
Gold Price Analysis: XAU/USD’s fate hinges on Wall Street sentiment, levels to watch – Confluence Detector
Gold (XAU/USD) is back to square one this Friday after Thursday’s rollercoaster ride, thanks to Reddit’s day-trader-led silver market craze. Gold licks its wounds near $1850, as traders await fresh US stimulus updates amid risk-off market mood and broad-based US dollar strength, Fxstreet reported.
The yellow metal is on track to book a monthly and weekly decline while holding onto the $1800 support. The sentiment on Wall Street and US economic data will emerge as the key catalysts. How is gold positioned on the technical graphs?
Gold Price Chart: Key resistances and supports
The Technical Confluences Indicator shows that gold is flirting with $1845, which is the confluence of the previous high four-hour, Fibonacci 61.8% one-day and SMA5 four-hour.
The next upside target is aligned around $1849, the convergence of the SMA200 one-day, SMA10 one-day and Fibonacci 38.2% one-week.
Buyers could then challenge $1853, the intersection of the SMA50 four-hour and Fibonacci 38.2% one-day.
Powerful hurdle at $1857 (Fibonacci 23.6% one-day/ SMA50 one-day) will continue to offer strong resistance to the price.
Meanwhile, the downside remains exposed towards $1834, the previous day.
A break below the latter could put the Fibonacci 61.8% one-week at $1830 to test.
The Fibonacci 61.8% one-month at $1825 is the last line of defense for the XAU bulls.
Price of Gold Fundamental Daily Forecast – Slow Pace of US Economic Recovery Troubling Fed, Gold Traders
We seem to be having a tug of war between bullish gold traders banking on massive fiscal stimulus and an oversold U.S. Dollar, said Fxempire.
Gold futures are trading lower shortly after the regular session opening on Thursday, pressured by a firm U.S. Dollar and Treasury yields, which are weighing on demand for the dollar-denominated asset. The Fed didn’t help matters when it said late Wednesday that it was concerned over the slow pace of the economic recovery.
At 13:07 GMT, April Comex gold futures are trading $1840.40, down $8.50 or -0.46%.
Federal Reserve Delivers as Expected
The U.S. Federal Reserve kept overnight interest rates near zero and made no change to its monthly bond purchases, as was widely expected, and pledged to keep that support intact until a full economic rebound is in place.
“The economy is a long way from our monetary policy and inflation goals, and it’s likely to take some time for substantial further progress to be achieved,” Fed Chairman Jerome Powell said at his post-meeting news conference. Policy will remain “highly accommodative as the recovery progresses,” he added.
Traders Watching Treasury Yields
U.S. Treasury yields are a little higher on Thursday morning, ahead of the release of fourth-quarter gross domestic product figures, due to be released at 13:30 GMT.
The yield on the benchmark 10-year Treasury note fell to 1% at 09:00 GMT, while the yield on the 30-year Treasury bond declined to 1.757%.
We could see some fireworks in the financial markets if the 10-year Treasury note yield falls decisively under 1%. That seems to be the line in the sand for U.S. Dollar and gold traders.
We seem to be having a tug of war between bullish gold traders banking on massive fiscal stimulus from the Biden Administration and an oversold U.S. Dollar. This seems to be the reason for the current rangebound trade.
The Fed may not have helped gold prices in the short-run, but it is still providing major long-term support. Enough fiscal stimulus to weaken the U.S. Dollar and lower yields will be bullish for gold, but if the coronavirus financial aid comes in lower than expectations then any attempt to rally will likely fizzle out.
Although gold prices appear to be rangebound, a new concern resurfaced on Wednesday – stock market volatility. It’s been about three months since we saw a sell-off like we did the previous session. With so many investors long stocks, any further weakness could encourage gold investors to sell-off positions to meet margin calls and to cover losses in the equity markets. This would pressure gold prices.
For those that think gold is a safe-haven asset, selling gold to pay off losses in the stock market would come close to fulfilling that thought.
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