Fundamental News and Triggers

• Before the US inflation report was released, gold prices dropped $80, but prices swiftly recovered. According to a report released yesterday by the US Bureau of Labor Statistics, the headline US CPI increased by 0.5% in January, the highest since August 2023, and the annual rate increased from 2.9% in December to 3%.
• The fact that gold has recovered from its intraday lows shows that investors still view the safe-haven asset as their main weapon against ongoing inflationary pressures and the Federal Reserve’s shift to a much more hawkish monetary policy. Despite short-term volatility, gold’s price behaviour indicates that the commodity is still well-supported.
• However, the US dollar is still unable to draw in any significant buyers and is hovering around the lower end of its weekly range as of Wednesday, further lending support to the yellow metal.

 

Technical Triggers

• Gold Apr Futures fell below the $2907 (~Rs 84700) support level and retraced towards $2880 (~Rs 83900) but prices didn’t sustain at lower levels and quickly bounced back after Inflation data. Gold prices have sustained above $2935 resistance today, so it is likely to maintain its upward momentum of $3000 (~Rs 87500) in a few days.
• Silver is still facing resistance at $33 (~Rs 96000). If prices remain above this level, we are likely to see a 5% upward for the target $35 (~Rs 101,000).

 

Support and Resistance

 

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