Gold and silver traded higher on Tuesday, supported by easing inflation concerns after crude oil prices extended their decline following the announcement of an interim US-Iran peace agreement. However, the precious metals rally remained measured as investors stayed cautious ahead of the US Federal Reserve's policy outlook, according to Kotak Securities.
Spot gold was trading near $4,345 an ounce, while spot silver hovered around $70.40 an ounce. Kotak Securities said markets have scaled back expectations of further US monetary tightening, with the probability of a December rate hike easing to 56% from nearly 70% earlier.
Investor attention is now firmly on the upcoming Federal Open Market Committee meeting, the first under Fed Chair Kevin Warsh. "Any indication of a softer or more accommodative stance could provide additional support to bullion prices," Kotak Securities said.
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The brokerage noted that lower rate-hike expectations, continued central bank purchases and portfolio diversification trends remain supportive for bullion. Citing World Gold Council data, it said 45% of global reserve managers plan to increase gold holdings over the next year. However, a stronger-than-expected Fed stance or improving risk sentiment could cap gains.
Key Levels To Watch
Spot Gold
Support: $4,299.9, $4,272.9, $4,185.8
Resistance: $4,387.0, $4,413.9, $4,501.1
Last Traded Price: $4,343.4
Spot Silver
Support: $69.15, $68.36, $65.79
Resistance: $71.72, $72.51, $75.08
Last Traded Price: $70.44
MCX Gold August
Support: Rs 1,52,172, Rs 1,51,552, Rs 1,49,545 per 10 grams
Resistance: Rs 1,54,178, Rs 1,54,798, Rs 1,56,805
Last Traded Price: Rs 1,53,175
MCX Silver July
Support: Rs 2,47,378, Rs 2,45,388, Rs 2,38,945 per kg
Resistance: Rs 2,53,822, Rs 2,55,812, Rs 2,62,255
Last Traded Price: Rs 2,50,600
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Meanwhile, crude oil remained under pressure, with Brent falling below $82 a barrel and WTI slipping below $79 a barrel as geopolitical risk premiums continued to unwind. Kotak Securities said expectations of supply recovery and easing disruptions are weighing on oil prices, although uncertainty surrounding the implementation of the Strait of Hormuz agreement could keep volatility elevated.
For bullion, the brokerage maintained a positive near-term bias, but said monetary policy expectations will remain the dominant driver. A dovish Fed signal could help gold and silver challenge resistance levels, while a hawkish surprise may trigger profit-taking despite the supportive backdrop from softer oil prices.
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