Gold Price Today (February 8): Faced two consecutive weeks of declines
Gold rates in Delhi, Chennai, Kolkata, Mumbai surges today
Gold rates have surged at all major cities on Sunday. On MCX, the gold rates have been at Rs. 48,060 with a hike of Rs. 330. Gold rate in Delhi for 22-carat has remained at Rs. 46,200 with a hike of Rs. 300 and that of 24-carat gold is at Rs. 50,400 with a hike of Rs. 300. In Chennai, the gold rate is at Rs 44,690 per ten gram of 22 carat with Rs. 140 increase and 24-carat gold Rs. 48,730 with a hike of Rs. 140, according to thehansindia.
The gold rates in Kolkata is at Rs. 46,780 per 10 gram of 22 carat and the rate of ten grams of 24 carat is at Rs. 49,480. In Mumbai, the gold rates have been at Rs. 46,170, and Rs. 47,170 per ten grams of 22 carat and 24 carat with a decrease of Rs. 210.
Gold rate in Bangalore City for the ten grams of 22-carat remained at Rs. 44,050 and that of 24-carat gold is at Rs. 48,060 with a surge of Rs. 300 and Rs. 330. While in the cosmopolitan city Hyderabad, the gold rate has been at Rs 44,050 per ten gram of 22-carat and 24-carat gold is at Rs. 48,060 with a surge of Rs. 300 and Rs. 330 on both the metals.
Gold and silver prices have weakened at global markets, making the domestic prices in India also weak, resulting in the fall of prices. However, the gold prices mentioned here are due at 8 am, the prices could alter at every moment, and hence the gold buyers need to track the live prices at a given time. The mentioned price is closing prices of yesterday while today's price would begin either with a decrease or an increase.
Gold Price Futures (GC) Technical Analysis – Firms After Testing Major Retracement Zone at $1787.30 – $1711.70
The direction of the April Comex gold market on Friday is likely to be determined by trader reaction to the 50% level at $1787.30.
Gold futures are edging higher early Friday on position-squaring ahead of today’s U.S. Non-Farm Payrolls report. The market is being underpinned by a slight dip in Treasury yields and a marginally weaker U.S. Dollar. Gains are likely being capped by increased demand for higher risk assets.
Most of the losses this week have been fueled by a stronger U.S. Dollar, which tends to weigh on foreign demand for the dollar-denominated asset. The greenback is headed for its best weekly gain in three months on Friday, lifted by growing confidence that the U.S. economic recovery will outpace global peers.
Looking ahead, the Labor Department will release its jobs report for January at 13:30 GMT. Economists expect 50,000 payrolls added last month, after a decline of 140,000 in December, according to Dow Jones. The unemployment rate is expected to stay at 6.7%.
There have been signs of improvement in the labor market recovery. Thursday’s weekly jobless claims data showed 779,000 first time filers, the lowest since November 28 and below the 830,000 expected by economists.
Daily Swing Chart Technical Analysis
The main trend is down according to the daily swing chart. A trade through $1784.60 will signal a resumption of the downtrend. The main trend will change to up on a trade through $1878.90.
The main range is formed by the March 16 bottom at $1467.00 and the August 7 top at $2107.60. Its retracement zone at $1787.30 to $1711.70 is major support. It stopped the selling at $1771.30 on November 30. On Thursday, gold tested this support zone, stopping at $1784.60.
The short-term range is $1878.90 to $1784.60. If the counter-trend rally continues then look for the move to possibly extend into its 50% level at $1831.80.
Gold Fundamental Forecast: Bearish
Gold prices have been unable to hold ground and the commodity has faced two consecutive weeks of declines after an attempted break higher in mid-January, said Dailyfx.
USD picks up momentum
A few factors are believed to be the key drives of gold weakness. Firstly, the US Dollar has been able to pick up bullish momentum as macroeconomic data for the US has been improving, with the US Dollar index setting a base on the 6th of January at 89.16, hindering USD-denominated commodities like gold and silver.
Fundamental factors aiding the US Dollar are the efficient vaccination rate the country is seeing, coupled with positive signs of cooperation coming out of US Congress with regards to further fiscal stimulus. The economic data has also been favorable, with ISM manufacturing and services data beating expectations, as well as a significant increase in ADP employment numbers on Wednesday. This better than expected reading was unfortunately not carried through to the NFP numbers released on Friday, with the actual figure falling 1k short of the 50k expected, and December figures revised downward to -227k from -140k.
Rise in bond yields offset gold hedge
Bond yields have been creeping higher in recent weeks and the US 10-year yield is now above the January 11th peak, sitting comfortably around 1.15%. The increase in yields weighs negatively on gold, a non-yielding asset, and this may well continue to be the case if expectations of future economic performance increase. In a low-interest environment, gold tends to outperform as its opportunity cost is low because investors are not foregoing interest that would be otherwise earned in yielding assets, but increasing yields offset this setup.
Another factor to take into account is inflation expectations, as an increase in inflation is likely the biggest upside risk for gold this year. Real yields were at a low this summer, allowing gold to outperform other assets, with a subsequent correction as rates normalized towards the end of the year. Assuming that the Fed will not cut interest rates further and that investors will not expect a further slowing down of the economy, the room for further declines in the real interest rate is limited. Therefore, a continuation of this positive trend, at which point real yields may become positive again, is likely to keep the price of gold subdued in the near-term.
Although expectations are for inflation to increase this year on the back of built-up demand, gold traders need to be prepared for the continuation of an environment of low inflation in the near future.
The US Dollar returned some of the previous gains when the figures were released, but it doesn’t ultimately change the direction the currency is heading in. If anything, it makes the Biden administration’s case for a large amount of stimulus stronger. Gold and silver prices are likely to remain underpinned by US Dollar performance in the near future.
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