Interest rate cut expectations pushed back to June

Fundamental News and Triggers

  • In January, US CPI inflation fell to 3.1% YoY, down from 3.4% the previous month. Following the report release, US Treasury yields edged higher, with the 10-year yield reaching 4.32% and the 2-year rate rising to 4.654%, the largest one-day increase since May 5, 2023.
  • After the positive US CPI report, traders in financial markets pushed back their forecasts for interest rate cuts to June from May. Inflation is dropping, but not fast enough for Fed policymakers to start lowering interest rates soon, which is pressurizing bullion prices.
  • The continued geopolitical tensions in the Middle East and Eastern Europe may limit the fall of the gold price.

Technical Triggers

  • Gold prices are trading on the lower edge of the range around $2000 (Rs 61400), if prices break this range, immediate support would be $1985 (Rs 61000).
  • Silver too is trading near important support of $22 (Rs 69300), if prices break this support, the next level to look for is $21.4 (Rs 67500).
  • Gold and Silver prices are trading in a very oversold zone, so we can expect a rebound and reversal too at current levels.

Support and Resistance

 

 

 

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