By Dr. Renisha Chainani, Head- Research, Augmont – Gold for all
While the gold and silver markets ended the week with slight gains, they remain trapped in their weeks-long channel, with resistance above $2060 and $23.5, respectively, holding firm. Fed officials want to keep interest rates in the 5.25-5.50% range for more time to see if January’s sticky inflation data was a speed bump or a pinhole. The Fed appears not in a hurry to move rapidly on rate decreases because it could generate upside risks to persistent consumer price inflation.
According to the CME Fedwatch tool, investors expect interest rates to remain constant in the 5.25-5.50% range during the March and May meetings. Meanwhile, the prospects of a June rate cut have dropped from roughly 54% to a little less than 50%. Fed policymakers’ requirement for sustained inflation below 2% for several months, as well as tight labour market conditions, are driving down prospects for early rate decreases.
On the geopolitical front, local authorities in Rafah, a Palestinian city near Gaza’s southern border, have blamed Israel and the US administration for increasing bombardment, which has culminated in an assault on residents.
The core Personal Consumption Expenditures Index (PCE), the preferred inflation gauge of the United States Federal Reserve, will be released next week, providing vital inflation data to markets. Markets will also receive more information on home sales and manufacturing activities.
For the next week, Gold is expected to continue its rangebound momentum from Rs 61000 to Rs 64000, while Silver is expected to trade in a range of Rs 70500 to Rs 73500.
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