On Thursday, gold prices began trading on the Multi Commodity Exchange (MCX) at Rs 59,043 per 10 grammes and fell as low as Rs 59,017 during the day. Prices on the world market were roughly $1,918.65 per troy ounce. On the MCX, silver opened at Rs 72,265 per kg and fell as low as Rs 72,191 during the course of the day. On the international market, the cost per troy ounce was roughly $23.713.
Spot gold decreased 0.40% to settle at $1918.17 as fresh worries about rate hikes were sparked by hotter-than-expected US ISM services data (August).
Sharekhan by BNP Paribas Associate VP Praveen Singh stated, “US ISM services Index for August was reported to be 54.50, which was significantly better than the estimate of 52.50. Additionally, the statistics demonstrated a notable improvement over the reading from July, which was 52.70. Concerns about inflation are raised by the ISM services price paid, which increased from 56.80 in July to 58.90 in August.
From 55 in July, new service orders increased to 57.50. US rates increased once more, pushing up the US Dollar Index and putting pressure on commodities. Even while ISM services data may not continue to show the same strength because of the entertainment sector’s strong backing of related industries, for the time being, it is anticipated to maintain yields and the US dollar steady.
US two-year yields decreased by 1.39% to end the day at 5.029%, while ten-year yields increased by roughly 0.60% to 4.29%. The US Dollar Index was rising as it neared the significant psychological resistance at 105, up 0.08 percent. With a hawkish leaning, Bank of Canada kept the benchmark rate unchanged. Factory orders in Germany decreased by 11.70% month over month in July, but retail sales in the Eurozone decreased by 1% year over year instead of the expected 1.20 percent, according to Singh.
Data on China’s trade balance for August, which were announced this morning, slightly above expectations. Initial unemployment claims (September 2), continuing claims (August 26), and unit labour costs (2Q final reading) are among the US data released today. Investors will also be monitoring the final 2Q GDP report for the euro zone.
The increasing likelihood of a rate hike by the US Federal Reserve later this year puts gold in danger of dropping much more. Slower corporate bond issuance would cut yields, which might help the price of gold, according to Singh.
Yesterday, the dollar index’s gain caused gold prices to close down 0.26% at 59088 levels. On speculation that the US Federal Reserve may raise interest rates, the dollar index is currently trading above the level of 104.80.
“October Gold closed at 59088(-0.25%) and December Silver closed at 72472(-1.33%),” according to an associate vice president at GCL Broking. The daily charts for Bullions appear poor, and the Momentum Indicator RSI confirms this. The given support levels for Gold in October are 59000/58800, while the given resistance levels are 59300/59600. Traders are encouraged to initiate new short positions in Gold and Silver at the given resistance level one with a stop loss of resistance level two and book near the given support levels. Support for Silver in December is 72000-7150, while resistance is 72800-73600.
Anuj Gupta, Head of Commodity and Currency at HDFC Securities, added to this by saying, “Positive US economic data, Trade Balance and Final Service PMI data, putting pressure on gold and providing support to the dollar.” Investors might sell gold right now on a gain of about 59300 with a stop-loss of 59575 and a target of 58900. Gold may trade between $1910 and $1925 on a global scale.