Gold, Silver Prices Shine On Fed's 2024 Rates Cut Hope; Yellow Metal Rises Rs 1,000-1,450, Silver Up Rs 3,800

Precious metals like gold and silver are shining mightily on Thursday after the US Federal Reserve decided to keep key rates at a 22-year high. But it was the remarks of three rate cuts in 2024 that boosted prices of these glittering metals. A dovish Fed comes as a spoilspot for demand in the dollar index, and that is just a positive pivot for haven assets. Yellow metal prices both at retail prices and MCX in India rose by Rs 1,000 to Rs 1,450, meanwhile, silver prices gained by nearly Rs 3,800 from the previous session.

Precious Metals On December 14:

Gold Prices:

A 10 gram of 22 carat is currently priced at Rs 57,650, rising by a huge Rs 1,000 from Rs 56,650. In the same carat, 1-gram to 100-gram gold has jumped massively from Rs 1,000 to Rs 10,000.

Meanwhile, a 10 gram of 24 carat rallied by Rs 1,090 to be available at Rs 62,890 as compared to Rs 61,800 of the previous day. Also, 1 gram to 100 grams of this carat has skyrocketed by Rs 109 to Rs 10,900.

Further, 18-carat gold was sparkling as well. 10-gram of 18 carats was available at Rs 47,170, up by Rs 820 from the previous day's print of Rs 46,350. Additionally, 1-gram to 100-grams gold here zoomed by Rs 82 to Rs 8,200.

Silver Prices:

Coming to silver, 1 kg of this metal has shot up by Rs 2,500 in a single day to Rs 77,500. On the previous day, 1 kg of silver was at Rs 75,000.

Whereas 1 gram to 100 grams of silver climbed by Rs 2.50 to Rs 250.

MCX Gold, Silver Prices:

MCX gold futures with the expiry of February 2024 trading at Rs 62,497 per 10 grams, rising by Rs 1,298 or 2.12%. However, in early trade, the bullion rose by Rs 1,429 to touch a high of Rs 62,628 from the previous closing price of Rs 61,199.

Moreover, MCX silver with March expiry soared by Rs 2,968 or 4.15% to trade at Rs 74,500 per 1 kg. In early trade, silver was up by Rs 3,787 to hit an intraday high of Rs 75,319 per 1 kg over the previous day.

International Gold Prices:

Spot gold in London was trading at the highest level in six days. XAU/USD touched an intraday high of $2,039.35 an ounce.

On a similar trend, US gold futures zoomed by about 3% and touched an intraday high of $2,053.50 an ounce.

Why Gold and Silver Prices Are Rallying Today?

In its latest monetary policy, the US Federal Reserve decided to maintain the target range for the federal funds rate at 5-1/4 to 5-1/2 per cent. Key Fed rates are kept at a 22-year high for the third consecutive policy. This was in line with expectations. However, the uplifting factor for commodities traders was that the Fed also hinted at multiple rate cuts in 2024.

The FOMC led by chair Jerome Powell expects three rate cuts in 2024.

Fed seeks to achieve maximum employment and inflation at the rate of 2% over the longer run. In support of these goals.

Fed's dovish statement led to the mass-dumping of the dollar by investors against world currencies. US currency has hit the 102.56 level, which is the lowest since August. Also, the 10-Year US Treasury Yield dived to a four-month low at 3.971%.

Lowering of policy rates usually tend to make haven assets like gold attractive in overseas market.

What do experts say?

Prashanth Tapse, Senior VP (Research), Mehta Equities said, "This Thursday morning brings three positive developments: WTI Oil prices touching a five-month low at $69 a barrel, FIIs purchasing shares worth Rupees 4711 crores in yesterday's trade, and the 10-year US Treasury note yield falling below 4.1%, the lowest since early August. The Federal Reserve's decision to keep interest rates steady at 5.25%-5.5% for the third time aligns with market expectations, with the FOMC anticipating a slowdown in inflation to 2.4% in 2024. Market sentiment increasingly reflects expectations of a future interest rate cut."

Meanwhile, Rahul Kalantri, VP of Commodities of Mehta Equities on precious metals said, "Anticipating robust positive momentum post the Fed meeting, we foresee gold testing $2100 per troy ounce and silver potentially revisiting the $25 per troy ounce level in the short term. Technical levels indicate that gold finds support at $2005-2018 with resistance at $2042-2051. Similarly, silver has its support levels at $23.65-23.51, and resistance is identified at $23.99-24.14. In INR, gold maintains support at Rs61,570-61,310, while resistance lies at Rs61,920 and Rs62,210. For silver, the support range is Rs72,450-71,880, and resistance is noted at Rs73,570 and Rs74,030."

On the previous day, Kalantri highlighted that on Wednesday, gold and silver traded laterally in the domestic market as market participants awaited the outcomes of the Federal Reserve meeting. Conversely, in the international arena, both gold and silver prices demonstrated notable strength, reaching new daily highs. This surge was attributed to the decline in the U.S. dollar index and Treasury yields following the U.S. Federal Reserve's indication of concluding its interest rate hike cycle.

Disclaimer: The recommendations made above are by market analysts and are not advised by either the author or Greynium Information Technologies. The author, the brokerage firm nor Greynium would be liable for any losses caused as a result of decisions based on this write-up. Goodreturns.in advises users to consult with certified experts before making any investment decision.