As the dollar sank on March 13 morning, gold prices rose to their highest levels in over five weeks as investors flocked to the safe-haven metal due to concerns over the worst US bank failure since the 2008 financial crisis.
Silver increased 1.22 percent to Rs 63,658 per kilogram, while gold increased 0.85 percent to Rs 56,630 for 10 grams on the Multi Commodities Exchange (MCX). After reaching its highest level since February 3 earlier in the day at $1,893.96 per troy ounce, spot gold was up 0.5% at $1,877.30. At $1,882.10, US gold futures saw a 0.8 percent increase.
The yellow metal’s upside was further extended as bullion finished the week on a higher note, the only commodity to do so the week before. Investors are still unsure whether the US Federal Reserve would begin big rate hikes due to recent favorable economic indicators.
The rise in the dollar index this week and anticipated future rate hikes should put pressure on gold. Although gold is frequently a hedge against inflation, demand for zero-yield metals declines when interest rates rise. Gold prices will likely remain under pressure as the Fed is anticipated to increase interest rates.
Due to possible contagion concerns from the Silicon Valley Bank (SVB) crisis and significant selling in the dollar index, the gold and silver market unexpectedly registered a weekly gain. Prices for gold and silver rose to a month-high and overcame key obstacles. Compared to expectations, the US non-farm employment increased by 3,11,000 jobs in February, which is much less than the 5,17,000 jobs added in January.
US Fed expects to raise rates
In February, the US jobless rate increased to 3.6 percent, exceeding the forecast of 3.4 percent. The dollar index declined in support of increased gold prices, and the two-year yield experienced its largest two-day loss since 2008. After the SVB bank scandal, the Fed has scheduled an emergency meeting for March 13 that could keep precious metals volatile.
On March 13, we anticipate continued price volatility for gold and silver. Gold’s support and resistance levels are $1,852 and $1,840, respectively. Support and resistance levels for silver are $20.44 and $20.25, respectively.
Support and resistance levels for gold in rupees are Rs 56,020-55,710 and Rs 56,510-56,780, respectively. Support and resistance levels for silver are Rs 62,420–62,010 and Rs 63,490-63,980, respectively.
Gold prices increased in the most recent session after disappointing US unemployment rate statistics caused the dollar index to fall. Comex gold prices reached a monthly high of about $1,882 as the Fed’s forecast of a hawkish rate hike has decreased from 60% to 30%. The dollar index dipped from its peak of $106 to $103.8, supporting the price of gold bullion.
The Silicon Valley Bank (SVB) frightened the international market, which increased bullion prices and served as a buffer against market volatility. The Fed implemented emergency steps over the weekend to make it simpler for troubled banks to obtain money.
Also, the White House guaranteed Silicon Valley Bank depositors would cover all withdrawals. The $1,900 level that Comex Gold is approaching may serve as a formidable roadblock. At $1840 is where support is found.
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