Gold Major Support: The present downside for mcx gold is the rally in US Treasury yields both in 2 years (near to 2007 high) and 10 years (above 4%).
- Gold is Trapped Between Hourly Support and Resistance
- Silver Technical Analysis: consolidation Zone $20.20-20.85
- Fed Minutes Confirm More Hikes to Come – Gold Silver Reports
- MCX Weekly Forecast: 20 To 24 February 2023 By Neal Bhai Research Report
Although gold prices have ignored the rising yields maintaining the momentum on the upside will be difficult if yields continue to rise. Until the Federal Reserve reverses course and retreats from its tightening agenda, real yields are likely to remain a headwind. In the medium term though, gold will see a respite from selling pressure as the kind of higher move we saw in the dollar in 2022 is unlikely to repeat in 2023. Even hedge funds and money managers who were long at the end of 2022 have become neutral.
The saving grace for gold is the physical tight market likely driven by the significant level of central bank buying we have seen in recent quarters. There is a small backwardation in futures indicating buyers are willing to pay a premium for immediate delivery of physical commodities despite the additional storage and transportation costs associated. Seasonality-wise, from March to July, gold has performed poorly because of a lack of retail physical buying but this doesn’t mean we might not see any rally. We might see gold consolidation in a larger range for the next few months.
- In MCX Gold, 54700 continues to be good support while in Spot Gold, $1777 is proving to be a good support zone. Next week there are plenty of triggers so we would advise traders not to carry any overleveraged positions and be ready for volatility. Any dips near 54700 could be buying opportunities with a stop loss of 53900 and an expected target of 56100—56840.