Gold prices declined in early trade on February 19. The pricing tracked gains in the US dollar after the Federal Reserve’s latest meeting minutes reduced optimism around rate cuts this year.
On the Multi Commodity Exchange (MCX) gold April futures fell around 0.40%, to Rs. 1,55,116 per 10 grams. Silver March futures dropped over 0.75%, to Rs. 2,42,439 per kg.
The price of 24K gold increased by Rs. 229 in early trade with ten grams of the precious metal trading at Rs. 1,56,490.
Price of 22K gold also rose by Rs. 210 with ten grams of the yellow metal selling at Rs. 1,43,450.
The price of ten grams of 24K gold stood at Rs 1,56,490 in Mumbai and Kolkata and Rs 1,58,180 in Chennai.
In Delhi the price of ten grams of 24K gold stood at Rs 1,56,640.
US dollar index rose to 97.73 and this is its highest level in over a week. A stronger US dollar makes gold prices increase for overseas buyers.
The minutes from the Fed's January meeting showed divided opinions among policymakers. Some officials believe that rate cuts should be there when inflation declines further. But others are still cautious and are open to tightening policy if price pressures persist.
Current market expectations are three rate cuts of 25-basis points this year based on CME's FedWatch Tool.
Investors are now focusing on key US economic data releases. This includes weekly jobless claims, the Personal Consumption Expenditure (PCE) inflation report, and advance GDP estimates.
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In international markets spot gold slipped 0.4% to $4,961.57 per ounce after it gained more than 2% in the previous session. US gold futures for April delivery fell 0.6% to $4,981 per ounce.
Spot silver eased 0.5% to $76.83 per ounce while platinum and palladium also traded slightly lower.
Despite the decline, domestic exchanges offered some relief. MCX and NSE withdrew additional margins 3% on gold futures and 7% on silver futures, effective February 19. This might improve liquidity conditions.
On MCX gold has immediate support at Rs. 1,54,400 followed by a stronger base near Rs. 1,52,200. Resistance is placed at Rs. 1,56,800 and Rs. 1,59,100. For silver support is at Rs. 2,38,000 and Rs. 2,32,800. The resistance is seen at Rs. 2,49,000 and Rs. 2,54,400.
Internationally gold has support at $4,964 and $4,915 while resistance is at $5,055 and $5,122 per troy ounce. Silver has support at $74.40 and $72 while resistance is at $80 and $82.40 per troy ounce.