Fundamental News and Triggers
Precious Metals gain after FED minutes
- Liquidity – Gold remains in a consolidation phase, largely due to thin liquidity conditions during the Lunar New Year holiday week. With major Asian markets — including mainland China, Hong Kong, Singapore, Taiwan, and South Korea — closed, trading volumes are subdued. The muted price action appears technical in nature rather than driven by any fundamental shift.
- Economic Data – On the Macro-economic front, minutes from the Federal Reserve’s January meeting indicated a divided policy stance. Some officials supported pausing further rate cuts until inflation shows clearer improvement, while others even discussed the possibility of rate hikes, advocating a balanced outlook. Following this, traders reduced expectations for multiple rate cuts this year. Markets now await key GDP and PCE inflation data, which could shape rate expectations.
- Geopolitical Tensions – Geopolitical tensions involving Iran have resurfaced. Reports suggest that any potential U.S. military action, if talks fail, could evolve into a prolonged campaign. This development may provide underlying support to gold if risks escalate further.
Technical Triggers
- As indicated in the previous report, gold has rebounded from its key support level near $4,850 (~ ₹1,50,000) and is now gradually advancing toward the resistance zone around $5,100 (~ ₹1,60,000). One may consider a buy-on-dips strategy near support levels and book profits on rallies closer to resistance, until a decisive breakout occurs.
- Silver has bounced from its support zone of $70–$90 (~ ₹2,25,000). Prices are now heading toward the resistance levels of $85 (~ ₹2,68,000) and $90 (~ ₹2,85,000). Given the volatility in silver, a buy-on-dips and sell-on-rallies approach remains appropriate within the current trading range.
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