Gold prices opened on the Multi Commodity Exchange (MCX) on Tuesday at Rs 65,932 per 10 grams and hit an intraday low of Rs 65,932. In the international market, prices hovered around $2,179.08 per troy ounce.

Meanwhile, silver opened at Rs 74,459 per kg and hit an intraday low of Rs 74,459 on the MCX. The price hovered around $24.44 per troy ounce in the international market.

Manav Modi, Analyst, Commodity and Currency, MOFSL, “Gold prices steadied just below record highs, with focus turning largely to upcoming US inflation data for more cues on when the Federal Reserve will begin cutting interest rates.”

Expectations of rate cuts saw bullion prices rise sharply to record highs last week on the back of weak economic data from the US, rate cut expectations, a fall in the dollar index and US Yields and an increase in speculative net long positions.

“Hawkish comments from Fed officials, however, have capped the gains on the higher side. Middling labour market data, which indicated some cooling in US employment, also aided bullion prices,” said Modi.

“US non-farm payroll data was reported at 275,000 against expectations of 195,000; however, this was offset by an increase in the unemployment rate, which was reported at 3.9% against the previous data of 3.7%. US inflation will be closely watched this week, especially after Powell and a string of Fed officials signalled that anxiety over sticky inflation was the central bank’s biggest consideration in lower interest rates,” said Modi.

The reading is expected to show some cooling inflation through February, although inflation is still expected to remain well above the Fed’s 2% annual target.

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Deveya Gaglani, Research Analyst—Commodities, Axis Securities, said, “Gold prices posted their best weekly gain of 4% last week as the probability of a rate cut increased in June. Due to geopolitical tension, Gold gained traction because of its safe-haven nature. Prices reached a record high of Rs 66,300 in the domestic market.”

“Investors will focus on CPI data, which is due in the evening. If inflation data comes hotter than expected, gold prices may correct down by 2-3%. However, the outlook remains positive as long as the 64500 level is intact on the downside,” said Gaglani.

Ravindra Rao, Head Commodity Research, Kotak Securities, said, “COMEX Gold prices rose for the eighth consecutive day as signs of a slowdown in the US economy raised the odds of a Fed pivot this year, weighing down on dollar index and treasury yields. According to Bloomberg forecasts, US CPI is expected to rise 0.4% m/m (3.1% y/y) in February, while core CPI is expected to rise 0.3% m/m (3.7% y/y). If the ongoing disinflationary trend continues, that might add to rate cut bets and boost gold prices.”

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first published: March 12, 2024, 09:22 IST

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Gold traders and investors are acutely aware of the dynamic impact that tomorrow’s CPI report will have on multiple financial sectors, including gold prices. Gold futures basis, the most active April contract traded to a higher low, and a lower high than Friday. Although gold is trading fractionally higher than Friday’s close, today’s trading range and the open and closing prices have formed a Japanese candlestick called a “doji” which means “the same thing” in Japanese.

A doji (dо̄ji) is the name given to a trading session (on a daily chart) in which the opening and closing levels are virtually equal. This is represented by a candlestick on a chart that looks like a plus sign, although it can contain longer or shorter wicks to either side or both. Based on this shape, market technicians make assumptions about price behavior. A doji generally signals either a trend reversal indication for analysts, but it can also signal indecision (consolidation) about future prices.

The key takeaway from this kind of Japanese candlestick is that neither the bullish nor bearish faction was able to gain control, which would create a green candlestick (when the close is above the opening price), or a red candle (when the session’s closing price falls below its opening price). The larger the candlestick, the more the controlling faction was able to move pricing in their desired direction,  that’s why little to no body size indicate neither side was successful.

The chart above is a daily chart of gold futures. Today April gold opened at $2187.60, and as of 5:23 PM ET is currently fixed at $2188.60 which means that the price differential between the opening price and the current fixed price is only one dollar. To the Japanese trader, the open, and closing relationship is a much more important factor than the Western trader assumes. To the Western trader, the most important relationship is between the closing price of the prior session and the current closing price, which is why gold is noted as trading up $3.10, because it is comparing the current close to Friday’s close.

This is the first time that gold has not traded to a higher high in the prior seven trading sessions. It indicates that neither the bullish nor bearish faction controlled the outcome of today’s trading session, and suggests that gold prices may either pivot or consolidate. The direction will largely be dependent on the outcome of tomorrow’s CPI report.

The dollar traded fractionally higher today, up +0.16% taking the dollar index to 102.85. The chart above is a daily Japanese candlestick chart of the dollar index, it shows that Friday’s trading range created a “doji” candlestick which had its wick fall below the 50% retracement which occurs at 102.59. However, the real body (the rectangle drawn between the open and closing price) was small when compared to the upper and lower wicks. Also, the last three days created a candlestick pattern called a “Three River Morning Star”.

The fact that the dollar formed a “doji” on Friday and that today’s session in gold created a “doji” candlestick could potentially signal a pivot in both gold and the dollar. If so, this would predict that the dollar index could move higher, and gold prices could move lower.

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Ahmedabad: Continuing its rally for the ninth consecutive session, the gold price climbed to Rs 67,800 per 10g in the Ahmedabad market on Monday. The price increased marginally compared to Rs 67,700 per 10g on Saturday’s closing in the local markets. The precious metal prices have been touching new record highs by the day. In the international markets, spot gold was trading at $2,176.75 per ounce around 6.45pm, as reported by the World Gold Council. Gold prices continued their upward trend, inching towards $2,182 per ounce. This price surge can be attributed to various macroeconomic factors and geopolitical tensions, which have heightened the demand for gold as a safe-haven asset. Silver price remained consistent at Rs 74,000 per kg. tnn

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