The price of gold is trading lower following the release of US inflation data. Support for gold prices is anticipated at the ₹60,500 level.

Gold prices in India experienced a decline on Wednesday, following the downward trend in international rates triggered by a surge in the US dollar and treasury yields spurred by inflation data.

International gold prices slipped below the significant $2,000-per-ounce threshold, hovering close to a two-month low. This dip came as a result of a stronger-than-anticipated US inflation report, prompting traders to adjust their expectations for deeper rate cuts by the Federal Reserve.

On the domestic front, MCX gold traded 0.21% lower at ₹61,376 per 10 grams, while MCX silver prices saw a decline of 0.44% to ₹69,330 per kg.

Spot gold remained relatively flat at $1,992.21 per ounce, after reaching its lowest point since December 13th on Tuesday. US gold futures also experienced a slight decrease of 0.1% to $2,005.00 per ounce.

According to Ajay Kedia, Director at Kedia Advisory, gold rates are facing pressure from various factors including the strengthening US dollar, higher-than-expected US inflation, delayed expectations for interest rate cuts by the US Federal Reserve, and geopolitical tensions.

However, the depreciation of the Indian rupee and a downturn in equity markets domestically are mitigating the losses in gold prices.

The US dollar index maintained near a three-month high, while 10-year Treasury yields were close to a 2-1/2-month peak. US Consumer Price Index (CPI) data revealed a 3.1% rise on an annual basis, surpassing forecasts for a 2.9% increase.

Traders have adjusted their expectations from four quarter-point rate cuts for 2024 to align with the Fed’s “dot plot” released in December. Reuters reported that the Fed might delay interest rate cuts until June.

Looking ahead, Kedia suggests that gold may find support at ₹60,500 level, with resistance observed at ₹62,300. For silver prices, support is anticipated at ₹67,800, while resistance is seen at ₹72,000.

Kedia also predicts a further rise in the US dollar towards the 105 – 105.5 levels, which could continue to exert pressure on gold prices. Investors are advised to keep an eye on US retail sales data scheduled for Thursday and producer price index numbers due on Friday.

(Note: The information provided above is based on individual analysts’ views and broking companies, and not endorsed by Mint. Investors are encouraged to consult certified experts before making investment decisions.)