Gold prices consolidating at a record high

Fundamental News and Triggers

  • Gold prices are consolidating at record highs in a range of $60 from the last 15-20 days as there are mixed cues from the economic front. The range is from $2470 (~ Rs 71000) to $2530 (~Rs 72300). Market participants are waiting for a catalyst or trigger for the price to choose one direction.
  • The haven demand for the US dollar is maintained even as markets reduce their expectations of a 50 basis point rate cut by the US Federal Reserve next week. This is due to the return of risk-off flows in Asia in response to growing concerns about a slowdown in the Chinese economy.
  • According to the CME Group’s FedWatch Tool, markets are currently pricing in a 29% chance of a 50 bps rate cut move, down from about 47% seen pre-NFP data release. For the remainder of the year, around 110 basis points of rate cuts are priced in.

 

Technical Triggers

  • If $2470 is broken, we might see profit-booking up to $2430 (~Rs 70000) and $2400 (~Rs 69000). While on the upside breakout, we could see new highs of $2550 (~Rs 73000) and $2600 (~Rs 75000) in the short-term.
  • Silver is gradually recovering from very important support of $28 (Rs 82500) and heading towards its resistance zone around $30.5 (Rs 88000).

 

Support and Resistance

 

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