Gold Rate Today: MCX Sees Slip Amid Strong Dollar and Fed Minutes

The gold rate eased on the MCX in early trades on Thursday, February 19, as a stronger US dollar pressured prices. Investors reacted after the release of the minutes from the US Federal Reserve’s latest policy meeting, which highlighted differing views among policymakers on the next steps for interest rates.

Despite the initial slip, the withdrawal of additional margins on gold and silver futures provided some support to prices, keeping the market slightly buoyant.

Market Performance

• MCX Gold April futures fell by nearly ₹650, or 0.40%, to ₹1,55,116 per 10 grams.
• MCX Silver March futures dropped over ₹1,800, or 0.75%, to ₹2,42,439 per kg.
• Dollar index climbed to 97.73, its highest level in over a week, making dollar-backed bullion more expensive for overseas buyers.

Key Drivers Behind the Move

The recent pullback in gold comes on the back of two main factors:

1. Fed Minutes Reveal Divergence
   The minutes of the US Fed’s January meeting highlighted a split among officials. While some see room for easing if inflation cools, others are ready to tighten policy should price pressures persist. This mixed signal added volatility to global markets.
2. Margin Withdrawal on MCX
   From Thursday, February 19, the MCX and NSE removed the additional margins of 3% on gold and 7% on silver futures. This step eased some of the pressure on traders and lent support to prices.

Short-Term Market Dynamics

• Liquidity in the market has thinned as short-term demand for precious metals eased. This was partly due to the Lunar New Year holidays in China, Korea, and several other countries.
• Geopolitical concerns, particularly around Iran, resurfaced in media reports, adding a layer of uncertainty for bullion markets.

Gold and Silver Levels to Watch

While prices remain under pressure, certain levels are key for market participants:

Gold (MCX April Futures):

• Support: ₹1,54,400 and ₹1,52,200 per 10 grams
• Resistance: ₹1,56,800 and ₹1,59,100 per 10 grams

Silver (MCX March Futures):

• Support: ₹2,38,000 and ₹2,32,800 per kg
• Resistance: ₹2,49,000 and ₹2,54,400 per kg

These levels reflect the immediate zones where buyers and sellers are active and could define the near-term trend for both metals.

Company & Exchange Notes

• The MCX and NSE’s withdrawal of extra margins is a strategic move aimed at easing trading costs and volatility in gold and silver futures.
• This step ensures smoother trading, especially amid mixed global cues and a strong dollar environment.

Summary

The gold rate softened on February 19 amid a stronger US dollar and cautious market sentiment following the US Fed minutes. While short-term demand dipped due to holidays in Asia, the removal of extra margins provided some relief to futures prices.

Traders and investors will now be watching key support and resistance levels closely, along with weekly US economic indicators, for fresh cues on the direction of precious metals.

Source: Livemint