Gold price today: Yellow metal trades lower after US inflation data; support seen at ₹60,500 level

Gold prices in India traded lower on Wednesday tracking losses in the international rates as US dollar and treasury yields spiked by inflation data.

International gold prices dipped below the key $2,000-per-ounce level, trading near a two-month low, as a stronger-than-expected US inflation report prompted traders to trim bets for deeper rate cuts by the Federal Reserve.

MCX gold traded 0.21% lower at ₹61,376 per 10 grams, while MCX silver prices declined 0.44% to ₹69,330 per kg.

Spot gold was flat at $1,992.21 per ounce, after hitting its lowest since December 13 on Tuesday. US gold futures fell 0.1% to $2,005.00 per ounce.

“Gold rates are under pressure due to several factors, including a spike in US dollar, higher than expected US inflation, expectations of delayed interest rate cuts by the US Federal Reserve and geopolitical concerns,” said Ajay Kedia, Director, Kedia Advisory.

However, on the domestic front, a weak rupee and decline in equity markets is limiting the losses in gold prices.

The US dollar index hovered near a three-month peak, while 10-year Treasury yields were near a 2-1/2-month high.

Data showed US CPI inflation rose 3.1% on an annual basis, above forecasts for a 2.9% increase.

Read here: US consumer inflation reduces to 3.1% in January

Traders have lowered their bets from four quarter-point rate cuts for 2024, in line with the Fed’s “dot plot” released in December. The Fed may wait until June before cutting interest rates, Reuters reported.

“Gold may find support at ₹60,500 level, while resistance is seen at ₹62,300. Support for silver price is placed at ₹67,800 and on the upper side, resistance is placed at ₹72,000 level,” Kedia added.

He believes the US dollar to rise towards 105 - 105.5 levels going ahead which may continue to pressurise the yellow metal prices.

Investors will now focus on US retail sales data due on Thursday and producer price index numbers due on Friday.

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(With inputs from Reuters)

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