Gold prices opened on the Multi Commodity Exchange (MCX) on Friday at Rs 66,057 per 10 grams and hit an intraday low of Rs 66,004. In the international market, prices hovered around $2,174.08 per ounce.

Meanwhile, silver opened at Rs 74,775 per kg and hit an intraday low of Rs 74,508 on the MCX. In the international market, the price hovered around $24.57 per ounce.

Gold and silver prices surged significantly. Gold touched an all-time high of Rs 66,940, surging by around 1200 hours from Rs 65,750, and silver touched Rs 78,000 in morning trade. However, average trading was seen at Rs 76,400, up by more than 1300 hours in response to the US Federal Reserve’s decision to keep interest rates unchanged.

Jateen Trivedi, VP Research Analyst, LKP Securities, “Following Fed rate announcement, prices rallied from $2,157 to $2,210, marking a notable $53 increase. This bullish momentum was driven by dovish commentary from Fed Chair Jerome Powell, who hinted at the possibility of three rate cuts.”

“Powell hinted that the Fed will soon be seeking to dial down the rate of QT, though he did not say when. Based on the CME Fed watch tool, traders were pricing in a 73.4% possibility that the Fed will cut rates for the first time as early as June. Speculative buying and short squeeze led the gold prices to cross previous highs of $2200 and this rally is expected to continue to $2,350 in the short term,” said Sachin Kothari, Director at Augmont.

Manav Modi, Analyst, Commodity and Currency, MOFSL, said, “Gold eased slightly, hitting pause after a blistering rally amidst Federal Reserve Chair Jerome Powell hinted that the central bank was on course for three interest rate cuts in 2024.”

Despite recent high inflation readings, Governor Powell said the central bank is still likely to reduce interest rates by three-quarters of a percentage point by end-2024.

The US Central Bank raised the inflation and growth forecast, mentioning that inflation is still sticky and the Fed will continue to be data-dependent.

Modi said, “Traders are now pricing in a 72% chance that the Fed will begin cutting rates in June, up from 55% before the rate decision. The sentiment of at least a 75bps rate cut this year gave a boost to safe-haven assets, and with that, the Fed also hinted at slowing the balance sheet runoff soon.”

After a good run-up, both Gold and Silver witnessed some profit booking. The Dollar Index also inched higher from the recent low of ~102.90.

On the data front, preliminary Manufacturing and Services PMI was reported better than expected. It will now be important to see how the Fed officials prepare the market.

Amit Khare, Associate Vice President at GCL Broking, said, “April Gold closed positive at Rs 66,189(0.66%), and May Silver closed negative at Rs 75,081 (-0.35%). Yesterday Gold made life time high of Rs 66,943; as per the daily chart, Bullions are trading in the mix zone, and Gold is looking strong while Silver is looking weak; the Momentum Indicator RSI also indicates the same; below are the important levels for the day: Gold April Support Rs 65,900/65,700 and Resistance Rs 66,200/66,400. Silver May Support Rs 74,400/74,000 and Resistance Rs 75,500/76,000.”