Gold, Rupee Rate Today and Outlook | EXPLAINED

Gold, Rupee Rate Today: Gold prices opened flat on Tuesday and prices consolidated for most of the session in the range of  Rs 44800 -Rs 45000 levels. Overall, prices remained supported in the last few sessions as U.S. Treasury yields eased, while investors awaited a U.S. Federal Reserve meeting which is likely to tackle concerns over rising inflation. Therefore, ICICI Securities expect Gold prices to recover further towards Rs 45400 level in the short term.

The USDINR pair remained almost flat for the day after initial volatility. As the Dollar index sustains below 92 levels, we feel INR is likely to appreciate towards 72.3 levels in coming days. The dollar-rupee March contract on the NSE was Rs 72.62 in the last session. The open interest rose by almost 0.6% for the March series. Intra-day strategy is to Sell US$INR in the range of Rs 72.84 – Rs 72.86.
 

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The daily price action formed a small bear candle confined within Monday’s trading range (15048-14745), indicating extended breather amid stock specific action.  Going ahead, ICICI Securities reiterate our constructive stance and expect Nifty to gradually retest the upper band of consolidation placed at 15300 in coming weeks. In the process, we expect the index to hold Monday’s panic low, placed around 14700. The rotational sectoral leadership in IT and FMCG signifies inherent strength. Therefore, any dip from here on should be capitalized as an incremental buying opportunity in quality large caps and mid caps stock.
 
Key point to highlight since September 2020 is that, on multiple occasions index has respected the key support of upward sloping trend line (as shown in chart) coincided with 50 days EMA and subsequently paved the way for the next leg of up move. In the current scenario as well Nifty bounced from the aforementioned strong support zone placed around 14700, highlighting inherent strength. The developed markets are trading at their life highs, indicating acceleration of upward momentum. ICICI Securities expect positive correlation to play out in the domestic market as well in coming weeks.
 
The broader market indices are undergoing healthy retracement after recent outperformance, as over past seven sessions Nifty midcap and small cap indices have retraced 50% to 61.8% of preceding four sessions up move. Slower pace of retracement signifies robust price structure that augurs well for subsequent up move. Thus ICICI Securities expect broader markets to accelerate relative outperformance in coming weeks.