Price Movement – Gold and silver pulled back on Tuesday, cooling off after touching their highest levels in more than three months. Traders are now looking ahead to the upcoming U.S. inflation print and a speech later this week from Federal Reserve Chair Kevin Warsh. With the Fed still giving no clear signal that it’s ready to get tough on inflation, fears around dollar debasement should keep gold well supported in the weeks ahead.

Geopolitical tensions – On the geopolitical side, Iran has vowed to hit back against Washington’s expanded economic sanctions, which the U.S. says are designed to choke off Iran’s economic lifeline. Tehran, for its part, sounded confident that its major trading partners won’t simply fall in line with the pressure campaign.

Macro-Economic Signals – Bullion had already rallied hard last week after the U.S. Treasury Department announced it would double the size of its liquidity support buyback operations for longer-dated notes and bonds — a move that reignited concerns about currency debasement.

Technical Triggers    

Gold has already hit its $4,600 (~ Rs 162,000) target, briefly touching a high of $4,696 (~Rs 164,700), and could now see some profit-booking and consolidation from these levels.

Silver came close to its $70 target too, peaking at $69.96 (~Rs 248,800), and may also be due for a pause as traders lock in gains.

Dr.Renisha Chainani, Head- Research, Augmont