US Fed rate cut: MCX Gold eyes new high; Silver can zoom to Rs 1,00,000

Technical charts suggest that the bias for Gold is likely to remain positive as long as Rs 73,100 holds; while in case of Silver the bullish pivot stands at Rs 89,000.

Gold and Silver prices have picked up momentum in recent trading sessions and are seen quoting at record high levels in the international market on hopes of an imminent interest rate cut by the US Federal Reserve this week.

"Gold continues to trade firm with International spot price moving close to $2600 per ounce, supported by a weaker US dollar and falling bond yields, amid rising expectation of a bigger rate cut by the US Federal Reserve at its policy meeting on Wednesday, said Pranav Mer, Vice President, EBG - Commodity & Currency Research at JM Financial Services Ltd.

Traders have priced in a cut of 25 basis points (bps), but the odds of a 50 bps cut is rising with both having a probability of near 50:50 now, the analyst added.

 

Gold prices have surged by nearly 3 per cent in the last three trading sessions and were seen firmly trading above the $,2600-mark. Gold prices have soared as much as 26.3 per cent so far in 2024.

In comparison, Silver prices have zoomed over 11 per cent in the last six trading sessions. Silver prices, however, were seen trading below its peak hit at $32.57 / troy ounce in May 2024. Overall, for the calendar year 2024, Silver prices have soared over 30 per cent thus far.

In the Indian context, Gold prices have not scaled fresh highs in recent days, but were seen quoting 1.3 per cent shy from its peak of Rs 74,731 hit in July 2024. This is mainly on account of a steep fall in Indian gold prices post the Union Budget, wherein the Finance Minister cut import duty on Gold from 15 per cent to 9 per cent.

However, the overall trend has been bullish in line with the global prices. The MCX Gold futures have zoomed 34 per cent thus far in 2024. Here's how prices look placed on charts at present.

MCX Gold October futures

Current Price: Rs 73,733

Upside Potential: 6.5%

Support: Rs 73,270; Rs 73,100

Resistance: Rs 74,035; Rs 74,800; Rs 75,550

Technically, the MCX Gold October futures are seen trading with a bullish bias on the daily scale. Chart shows the bias is likely to remain favourable as long as Gold prices sustain above Rs 73,270 levels. 

On the upside, Gold futures can potentially rally to Rs 78,530 levels; with interim resistance seen at Rs 74,035, Rs 74,800 and Rs 75,550 levels. On the flip side, break and sustained trade below Rs 73,100 can force Gold prices slip back to Rs 71,850 levels.

"Gold continues to trade firm with International spot price moving close to $2600 per ounce, supported by a weaker U.S. dollar and falling bond yields, amid rising expectation of a bigger rate cut by the U.S. Federal Reserve at its policy meeting on Wednesday. Traders have priced in a cut of 25bps, but the odds of a 50bps cut is rising with both having a probability of near 50:50 now".

Echoing similar views, Pranav Mer says the trend remains positive for Gold, with support at Rs 73,299/ Rs 73,000, while on the upside prices may test Rs 74,200/ Rs 74,550.

MCX Silver December futures

Current Price: Rs 90,160

Upside Potential: 10.9%

Support: Rs 89,000

Resistance: Rs 90,700; Rs 92,500; Rs 95,000

The MCX Silver futures have given a bullish breakout and seen trading firmly above the higher-end of the Bollinger Bands on the daily scale. The near-term bias is likely to remain upbeat as long as Silver prices sustain above Rs 89,000 levels. 

The MCX Silver futures seem on course to test the higher-end of the Bollinger Bands on the weekly scale, which suggest an upside target of Rs 95,000 levels; with near resistance seen at Rs 90,700 and far hurdle at Rs 92,500 levels. 

The long-term chart suggests that Silver futures can potentially hit the RS 1,00,000-mark, if prices sustain above Rs 95,000 levels. So far in the calendar year 2024, Silver prices in India have surged by over 21 per cent.