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Experts state that the current MCX gold rate barrier is around ₹63,200 per 10 gm level.
Today’s gold rate: The price of gold ended the previous week more than 0.75 percent higher, despite the US Federal Reserve’s promise to maintain a high rate of interest. The February 2024 expiry gold future contract on the Multi Commodity Exchange (MCX) closed at ₹63,200 per 10 gm level, recording a weekly gain of ₹1,250 per 10 gm compared to the previous Friday close of ₹61,950 per 10 gm. The price of gold closed at $2,039 an ounce on the global market, recording a weekly rise of more than $21.
Experts in the commodities market claim that despite decreasing expectations of an interest rate cut in March 2024, the gold price managed to show recovery due to tensions in the Middle East. They claimed that while the Red Sea situation increased demand for gold as a safe haven, the US dollar’s strength due to positive US job data limited the gold rush. According to them, the MCX gold rate has critical support at the 61,500 level, but resistance is located at the ₹63,200 level.
Reasons of the gold price increase
Anuj Gupta, Head of Commodities & Currency at HDFC Securities, explained why the price of gold increased in spite of decreasing expectations of a rate drop in March 2024: “The valuable yellow metal displayed endurance despite US Fed meeting reduced hopes of an interest rate cut in March 2024.” The Red Sea catastrophe is largely responsible for this resiliency.”
Middle East geopolitical worries contributed significantly to the week’s increase in demand for gold as a form of refuge. However, a stronger US dollar and higher government yields caused gold to give up some of its gains towards the conclusion of the week. This change was prompted by the publication of a strong jobs report in January 2023, which showed an increase of 353,000 jobs above December 2023 data in addition to the market’s projection of 187,000 jobs. Strong wage growth figures also suggested ongoing price pressures, casting doubt on the prospect of future rate reduction.
Outlook for price of gold
Experts provided the following analysis on the forecast for the price of gold in the near future: “According to the price action, gold looks to have built a foundation around ₹61,500 per 10 gm, or $2,000 per ounce. However, resistance is observed at the ₹63,200 per 10 gm level. A persistent rise above the ₹63,200 per 10 gm mark might open the door for further gains, with the precious metal aiming for the upper ₹63,800 per 10 gm or $2,080 per ounce level.”
Disclaimer
The opinions expressed above are not those of Swing Trade Plan; rather, they are the opinions of certain analysts or broking firms. Before making any financial decisions, we suggest investors to consult with qualified specialists.
