• Gold and silver experience steep selloffs, as investors wait for hints on the Federal Reserve’s policy course from a succession of US economic data releases this week, marking the fourth straight session of losses amid waning hopes for a US interest rate cut.
  • A rate cut in December has become less likely due to the absence of US data over the last six weeks and hawkish comments made by a number of Fed officials.
  • Thursday’s September Nonfarm payroll data will be eagerly watched by traders for clues about the state of the US economy, and the Fed’s most recent meeting minutes will be released on Wednesday to offer more rate direction. The market’s implied probability of a 25 basis point rate cut in December has dropped from nearly 60% earlier this month to 43% now.
  • However, structural tailwinds such as geopolitical unpredictability, worries about the sustainability of US debt, de-dollarisation trends, and central bank purchases are anticipated to sustain investment demand for gold and silver throughout the medium and long term.

Technical Triggers   

  • Gold has broken an important support of $4050; the next target support is $3950 (~Rs 120,000).
  • Silver has broken the important support of $50, the next target support level is around $48.5(~Rs 150,000) and $47(~Rs 145,000).

Dr.Renisha Chainani, Head- Research, Augmont