Gold price today: Gold prices softened in domestic and global markets on Wednesday, August 20. The strength of the dollar affected investor sentiment, due to which gold contracts for October delivery on the Multi-Commodity Exchange (MCX) fell 0.05% to ₹ 98,650 per 10 grams. Meanwhile, silver for September delivery slipped 0.40% to trade at ₹ 1,10,900 per kg.
A rise of about 0.20% in the dollar index made gold expensive in foreign currencies, weakening the immediate demand of investors.
The world is focused on the speech of the Federal Reserve and Powell
Investors are now eyeing the minutes of the July meeting of the US Federal Reserve, which are to be released late this evening. On the other hand, Fed Chairman Jerome Powell’s speech at the prestigious Jackson Hole Symposium to be organized by the Kansas City Federal Reserve on Friday is considered very important for the market.
This annual conference is the most talked-about platform for central bankers around the world, where the indications given can determine the interest rate policy for the coming months. At present, trade tensions, new tariffs, and changing geopolitical conditions have increased uncertainty in the market. This is the reason why global investors are cautious about Powell’s statement.
The expectation in the markets has deepened that the Fed may cut interest rates by 25 basis points in September.
Hope for peace in the Russia-Ukraine war
Another important aspect affecting gold prices is the geopolitical situation. According to a Reuters report, Ukrainian President Volodymyr Zelensky described the recent talks at the White House as a “big step” towards ending the war. There is also talk that a trilateral meeting with Russian President Vladimir Putin and former US President Donald Trump may be possible.
If concrete steps are taken towards ending the conflict, the demand for safe investment assets like gold may reduce to some extent.
Experts’ opinion: Where are the support and resistance
Manoj Kumar Jain of commodity research house PrithviFinmart says that one should avoid making new deals in gold and silver before the Fed minutes. He said that in the international market, gold is getting support at $3,340–$3,320 per troy ounce and resistance at $3,370–$3,389. On the other hand, silver is getting support at $37–$36.80 and resistance at $37.70–$38.
Talking about the domestic market, gold has support at ₹98,380–₹98,000 and resistance at ₹99,000–₹99,360 on MCX. Support for silver is at ₹1,10,800–₹1,10,000 while resistance is seen at ₹1,12,000–₹1,12,800.
Rahul Kalantri, Commodity Vice President, Mehta Equities, also shared a similar view. According to him, gold has support at $3,295–$3,276 internationally and resistance at $3,335–$3,350. Silver is trading with support at $37–$36.75 and resistance at $37.55–$37.80.
In Indian rupees, he said support for gold is ₹98,350–₹98,050 and resistance is ₹99,150–₹99,450. On the other hand, silver is getting support at ₹1,10,580–₹99,750 and resistance at ₹1,12,350–₹1,12,950.
Way forward: What should investors do?
At present, the strategy of investors is to wait cautiously. Making a big deal before the Fed minutes and Powell’s speech can be risky. If the Fed adopts a soft stance and reduces rates in September, then gold can again catch up. But if the stance remains tough, then there can be more pressure on the prices.
In the near future, the strength of the dollar and geopolitical developments will decide the direction of gold and silver. Updates related to the Jackson Hole conference and Russia-Ukraine talks can make the market movement more exciting in the next few days.