Gold price today: Yellow metal crosses Rs 57,000-mark for first time ever; what's driving the rally?

Gold Price Today: Gold price on Tuesday continued its rally to touch an all-time high of Rs 57,000 per 10 grams. The gold future contract for February 2023 quoted Rs 57,044, up by 0.40 per cent, on the multi-commodity exchange at 9:30 AM. Silver was trading at Rs 68,343, up nearly 0.60 per cent, on the MCX around the same time.

The rally in yellow metal in the last few weeks could be attributed to a weaker Dollar and sluggish US yields. Also, investors await the release of the ed US economic data for Q4 amid hopes of slower interest rate hikes by the Federal Reserve when it meets next later this month. The US GDP data will be released on Thursday.

According to Praveen Singh, AVP, fundamental currencies and commodities analyst at Sharekhan, the precious could slip into a consolidation phase ahead of the release of US GDP data.

He said that although the US yields have staged a mini rebound from cyclical lows, the US Dollar Index remains under pressure on Fed speculation and weak data out of the US."Investors expect the ECB to hike interest rates more than the Fed from the current levels. This notion is weighing on the US Dollar Index. The Index may fall to 100 in near-term," he said.

Spot gold rose nearly 0.20 per cent to quote above $1,935 per ounce.Singh said that the metal is looking set to test $1950-$1960 while support is seen at $1900.

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Commodity and currency expert Anuj Gupta said that the weakness in the dollar and the expectation of less interest rates hike by the federal reserve are the major factor for the gold rally. 

In short term, he said, gold may test Rs 57000 to Rs 57300 ($1950) levels. "In a long term till Diwali 2023, We are expecting it may test Rs 58,000 to Rs 60,000 levels ($2000 to $2100) levels. Sentiments are positive and physical buying will Support the gold prices as demand is on pre-Covid levels."

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From trading perspective, IIFL Securities has recommended buying Gold and Silver.

Gold February Contract

Target Price: Rs 57,300

Stop Loss: Rs 56,550

Silver March Contract

Target Price: 68,500

Stop Loss: Rs 66,800