Gold and silver prices today: Yellow metal rises as US inflation inches up

Gold prices opened on the Multi Commodity Exchange (MCX) on Tuesday at Rs 58,800 per 10 grams and hit an intraday low of Rs 58,779. In the international market, prices hovered around $1,922.80 per troy ounce. Meanwhile, silver opened at Rs 70,050 per kg and hit an intraday low of Rs 69,933 on the MCX. The price hovered around $22.80 per troy ounce in the international market. 

Yesterday, spot gold closed with a slight loss of 0.13% at $1912.06 as the metal extended its losing streak to the fourth day.  

Praveen Singh, Associate V.P., Fundamental Currencies and Commodities, Sharekhan by BNP Paribas, said, "The U.S. July CPI inflation report showed that U.S. Core CPI posted the smallest back-to-back rise in two years. Core CPI inflation rose 0.20% m--o-m for a second month. Headline CPI inflation also rose 0.20%. Annual headline CPI inflation rose 3.20% y-o-y (June reading 3.30%) as against the median estimate of 3.30%, while core CPI inflation was up 4.70% y-o-y, which matched the forecast, and edged lower from June reading of 4.80%. Used car prices fell 1.30% m-o-m, airfares dipped 8.1%, and medical care was down 0.20%. Super core services fell 0.20% m-o-m but re-accelerated from 4% y-o-y in June to 4.10% in July mostly on base effects (July 2022 reading stood at 5.10%). Housing components and rent are likely to decline further in the coming months." 

The U.S. Weekly jobless claims were also reported better than expectations at 248k against expectations of 230k. 

"The U.S. treasuries initially rallied as worse-than-expected jobless claims and Inflation data eased concerns about a Fed rate hike in September ( current probability 10%); however, treasuries eventually fell on the notion that headline inflation will rise again in August due to high crude oil prices, though core may not be impacted much. In addition, Fed's Mary Daly said that the Fed has more work to do, and officials have yet to decide whether to raise rates and how long to keep the rates higher, which further boosted yields and Dollar," said Singh. 

 Ten-year US yields rose 2.27% to 4.106%, whereas two-year shot up by 0.86% to 4.85%. The U.S. Dollar Index recovered nearly 0.90% to close with a gain of 0.15% at 102.64.  

Today's major data releases include UK GDP, China's new Yuan loans, and the US PPI, University of Michigan consumer sentiment, and University of Michigan consumer inflation expectations. 

Gold prices ticked up after data showed U.S. consumer prices increased moderately in July, cementing expectations the Federal Reserve is at the end of its rate hike cycle.  

Manav Modi, Analyst, Commodity and Currency, MOFSL, said, "The US CPI (MoM) rose 0.2%, in line with expectations,  US CPI (YoY) advanced 3.2%, up from a 3.0% rise in June, which was the smallest year-on-year gain since March 2021. Following the data, the dollar eased against major crosses. However, benchmark U.S. 10-year bond yields rose in a choppy session, keeping gold gains in check. The probability the Fed leaves rates unchanged at its September meeting is now at ~90% from ~85% prior to the data, according to the CME’s FedWatch Tool. Focus today will be on US PPI, Michigan consumer sentiment, India IIP and UK GDP data." 

Amit Khare, Associate Vice President at GCL Broking, said, "October Gold closed at 58855(-0.20%) and September Silver closed at 69981(0.02%), Bullion daily charts are trading near oversold zone, any time we can see short covering rally in bullion. Momentum Indicator RSI also indicating the same. So, traders are advised to make fresh buy positions in Gold and Silver near given support level one with the stop loss of support level two and book near given resistance levels: Gold October Support 58800/58600 and Resistance 59200/59500. Silver September Support 69500/69000 and Resistance 70500/71000."