Gold prices rose by 0.38% yesterday, settling at 66367, as investors eagerly awaited U.S. inflation data to gauge the Federal Reserve's stance on monetary policy. Despite recent high inflation readings, Fed policymakers remain committed to reducing interest rates by three-quarters of a percentage point by the end of 2024. Central banks' continued gold purchases for diversifying currency reserves bolstered market sentiment.
Investor attention now turns to the U.S. core personal consumption expenditure (PCE) price index data for February, scheduled for release on Friday, as it could provide crucial insights into inflation trends. Meanwhile, India's gold imports are anticipated to plummet by over 90% in March compared to the previous month, marking the lowest levels since the COVID-19 pandemic. Banks reduced imports due to record-high prices denting demand, potentially curbing a rally in global gold prices. March 2024 gold imports are forecasted to hit their lowest point since the pandemic, attributed to air traffic restrictions limiting imports and lockdowns shuttering jewellery shops.
From a technical perspective, the market saw short covering, with a significant drop in open interest by -37.04% to settle at 3812. Prices surged by 253 rupees. Currently, gold finds support at 66090, with a potential further support level at 65815. Resistance is anticipated at 66570, with a potential upward movement towards 66775 upon surpassing resistance levels. This technical overview suggests a cautious stance amid fluctuating market dynamics and awaits further data releases for clearer directional cues.