GOLD Analysis
Afternoon: Gold Prices Hold Steady amidst Awaited Fed Decision and Indian Demand Concerns
Highlights:
- Gold prices stable ahead of Fed meeting & economic data.
- Indian gold demand may hit 4-year low on price hikes.
- Key data: CPI Flash Estimate, Employment Cost Index, etc.
Introduction:
Gold prices remained stable as investors awaited crucial economic data and the Federal Reserve's policy decision. Anticipation surrounds the Fed's two-day meeting and the release of non-farm payrolls data later this week, pivotal for gauging interest rate movements. Meanwhile, concerns arise over India's gold demand, potentially reaching a four-year low due to recent price hikes.
Federal Reserve's Policy Meeting:
The Federal Reserve is expected to maintain its benchmark interest rate at 5.25% to 5.5% throughout the ongoing two-day policy meeting. With inflation showing resilience, Fed members grapple with defining future monetary actions, particularly in the wake of hotter-than-expected consumer price inflation data for March.
Indian Gold Demand Outlook:
Despite an 8% rise in India's gold demand in March compared to the previous year, recent price escalations could dampen total consumption in 2024, potentially hitting a four-year low. The World Gold Council (WGC) projects demand to range between 700 to 800 metric tons, with prices likely dictating consumption trends. Elevated gold prices, reaching a record high in March, impact investment demand positively while restraining jewelry consumption, a significant component of overall demand.
Key Economic Data and Technical Analysis:
Key economic data releases include Core CPI Flash Estimate y/y, CPI Flash Estimate y/y from the Euro Zone, Employment Cost Index q/q, S&P/CS Composite-20 HPI y/y, and CB Consumer Confidence from the US Zone. Meanwhile, gold price technical analysis indicates hurdles around the 200-hour Simple Moving Average and Fibonacci retracement levels. Support and resistance levels for the day are projected at $2300 and $2360 for Gold prices and at 71200 and 72000 for Gold MCX prices.
Conclusion:
As markets await the Federal Reserve's decision and economic data releases, gold prices remain stable, influenced by global economic trends and domestic demand dynamics. The Indian gold market faces challenges amidst record-high prices, potentially leading to a four-year low in demand. Investors keenly observe price movements and economic indicators for insights into future gold market trends.
Support and Resistance Levels:
