Gold prices dropped in the domestic futures market on Thursday morning, January 23, despite positive cues from global markets. The decline came amid subdued spot demand and volatility in the Indian rupee, triggering fresh profit booking in the yellow metal. At around 9:15 AM, MCX Gold for February 5 expiry was trading 0.14% lower at ₹79,456 per 10 grams, following a session where it gained 0.43%, settling at ₹79,564 per 10 grams.
In international markets, gold prices remained close to their record high amid ongoing uncertainty surrounding US President Donald Trump’s trade policies. Reuters reported that Trump’s administration was considering imposing a 10% tariff on Chinese goods starting February 1, alongside potential duties on European imports, although further details were not provided.
Focus on US Federal Policy and India’s Union Budget
Investor sentiment is largely driven by US Federal policy expectations, with growing anticipation that the Federal Reserve will hold off on interest rate cuts in its upcoming meeting, given the strength of recent US economic data. Additionally, attention is shifting to India’s Union Budget for 2025, where potential changes to the customs duty on gold could significantly impact prices in the domestic market.
In the previous year’s budget, the Indian government reduced gold import duties to stabilize prices amid persistent inflation and to ensure a steady supply. However, the reduction in import duty raised concerns over increased gold consumption, which could further widen the country’s trade deficit. As the world’s second-largest consumer of gold, India relies heavily on imports to meet most of its demand.
Expert Insights and Key Levels for MCX Gold
Experts are predicting continued volatility for gold and silver prices this week due to fluctuating dollar indices, Trump’s tariff plans, and policy meetings by the Bank of Japan.
Manoj Kumar Jain, from Prithvifinmart Commodity Research, suggests that gold has support at $2,755-$2,744 per troy ounce and resistance at $2,784-$2,796 per troy ounce. He also highlighted that MCX Gold has support at ₹79,300-79,080 and resistance at ₹79,800-80,000. Jain recommends buying gold on dips around ₹79,250 with a stop loss at ₹79,000 and a target of ₹79,800.
Rahul Kalantri, VP of commodities at Mehta Equities, has a slightly different outlook. He sees gold support at $2,737-$2,720 and resistance at $2,767-$2,782, with silver support at $30.45-$30.30 and resistance at $31.10-$31.30. In INR, he forecasts gold support at ₹79,240-78,980 and resistance at ₹79,780-79,920, while silver support is pegged at ₹91,570-91,000 and resistance at ₹92,880-93,670.
Conclusion
Gold prices are facing downward pressure amid profit booking and uncertainty over US trade policies. While global cues remain favorable, domestic factors such as potential changes in India’s gold import duties and expectations for the US Federal Reserve’s stance on interest rates will continue to play a crucial role in determining future price movements. As volatility persists, traders are advised to monitor key support and resistance levels to navigate the fluctuations in both the global and domestic gold markets.