The U.S. Federal Reserve has decided to keep interest rates unchanged, but concerns over stagflation are mounting as the central bank downgraded the U.S. economic growth forecast while raising its inflation outlook. This dual move signals the possibility of a prolonged period of high inflation combined with slow economic expansion, a scenario that is typically unfavorable for economic stability but beneficial for safe-haven assets like gold.
Gold prices surged past the crucial $3,050 per ounce mark on the Comex as investors reacted to the Fed’s policy stance. In the domestic market, gold on MCX neared ₹89,000 per 10 grams, while silver continued to trade above ₹1,00,000 per kilogram. Market analysts suggest that fears of stagflation, a slowing economy, and geopolitical tensions will continue to drive demand for precious metals.
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PBoC Followed US Fed
The People’s Bank of China maintained the 1-year loan prime rate at 3.1% and the 5-year LPR at 3.6%, unchanged since the quarter-point cut in October. This decision aligns with the U.S. Federal Reserve’s recent move to keep benchmark interest rates steady.
Fed’s Economic Projections Raise Alarm
The Federal Open Market Committee (FOMC) adjusted its economic projections, lowering the GDP growth forecast for 2025 to 1.7%, down from the previous estimate of 2.1%. At the same time, the inflation forecast was raised, with core prices expected to rise by 2.8% annually, up from the previous projection of 2.5%. This divergence between inflation and economic growth has fueled fears of stagflation—a scenario where economic stagnation is coupled with rising prices.
In a statement, the FOMC noted that “uncertainty around the economic outlook has increased,” adding that the Fed remains “attentive to the risks on both sides of its dual mandate.” With the U.S. economy facing potential tariff shocks and the risk of increasing unemployment due to mass layoffs, the likelihood of stagflation is becoming a key concern.
Market Reaction: Gold and Silver Gain Momentum
Following the Fed’s announcement, gold and silver showed high volatility in early trading. Despite some profit booking, gold futures on Comex remained strong above $3,050 per ounce, while silver held firm above $34 per ounce.On Wednesday, international gold futures for April settled at $3,041.20 per troy ounce, up by 0.01%, while silver May futures closed at $34.205 per troy ounce, down by 1.76%.
In the domestic market, gold April futures on MCX settled at ₹88,602 per 10 grams, down 0.14%, while silver May futures ended at ₹99,924 per kilogram, down 1.33%. Analysts noted that the strengthening rupee led to some downward pressure on domestic gold prices.
Expert Views on Gold and Silver’s Future Outlook
Manoj Kumar Jain, Director, Prithvi Finmart
Jain expects gold and silver prices to remain volatile amid fluctuations in the dollar index, trade war concerns, and inflation data. However, he believes gold and silver could hold their key support levels of $2,922 and $32.40 per troy ounce, respectively, on a weekly closing basis.
Gold Support Levels: $3,022 – $3,008 per troy ounce
Gold Resistance Levels: $3,055 – $3,080 per troy ounce
Silver Support Levels: $34.00 – $33.74 per troy ounce
Silver Resistance Levels: $34.50 – $34.84 per troy ounce
MCX Levels:
Gold: Support at ₹88,360 – ₹88,080, resistance at ₹88,880 – ₹89,300
Silver: Support at ₹99,200 – ₹98,400, resistance at ₹1,00,750 – ₹1,02,000
Jain recommends buying gold above ₹88,800 with a stop loss of ₹88,550 for a target of ₹89,300. For silver, he suggests buying above ₹1,00,000 with a stop loss of ₹99,200 for a target of ₹1,02,000.
Kedia Commodity: Technical Analysis
According to Kedia Commodity, gold’s technical outlook indicates long liquidation, with open interest falling by 5.37% to 13,263 contracts. They predict:
Gold Support Levels: ₹88,355, with a break below testing ₹88,105
Gold Resistance Levels: ₹88,935, with a breakout potentially pushing prices to ₹89,265
For silver, open interest dropped 3.58% to 22,417 contracts.
Silver Support Levels: ₹99,280, with a break below possibly testing ₹98,640
Silver Resistance Levels: ₹1,01,015, with a breakout potentially pushing prices to ₹1,02,110
IIDM: Key Resistance & Support Levels
Gold Resistance: $3,060 (if crossed, the next upside move could reach $3,075 – $3,090)
Gold Support: $3,030 – $3,025 (breaking below could lead to further decline toward $3,015 – $3,000)
SMC Global: Trading Range for Gold and Silver
SMC Global expects gold to trade within ₹88,800 – ₹89,200 and silver between ₹99,800 – ₹1,00,800, with a sideways to bullish bias.
Thursday, March 20, 2025
United States
06:00 PM – Initial Jobless Claims Moving Average
United Kingdom
05:30 PM – Bank of England Interest Rate Decision
Friday, March 21, 2025
United States
02:00 AM – Federal Reserve Balance Sheet (March 19)
Other Major Events
Tariff Announcements by President Trump
Trump’s Statement on Trade and Economy
Russia-Ukraine War Developments
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Disclaimer:
The information provided in this article is for informational purposes only and reflects the views of industry experts. Before making any investment decisions, it is recommended that you consult a financial advisor. The team at Gold Price Today does not engage in personal buying, selling, or trading of gold or silver on exchanges. We are not responsible for any gains or losses incurred based on the information presented here.
