New Delhi: Gold prices were under pressure on Monday dragged by a firm dollar, while investors positioned for key US inflation data and the Federal Reserve’s rate-hike verdict due this week.
In the Fed’s final meeting of 2022 scheduled on December 13-14 traders are pricing in a 93% chance of a 50-basis-point rate hike by the Fed.
Gold futures on
were trading higher, gaining 0.29% or Rs 157 at Rs 54,138 per 10 grams. However, silver futures dropped 0.48% or Rs 325 at Rs 67,713 per kg.
Rahul Kalantri, VP Commodities, Mehta Equities said that Gold and silver extended gains last week despite hotter-than-expected US inflation data coupled with weakness in the dollar and fall in US bond yields
“After the higher than expected inflation readings the dollar index recovered from its lows but gold and silver maintained their bullish momentum,” he said.
High interest rates have weighed on gold’s traditional status as a hedge against inflation and other uncertainties this year, as they translate into higher opportunity cost of holding the non-yielding metal.
Gold premiums in China rose last week as demand picked up after the top consumer eased COVID-19 restrictions, while high prices muted activity in India.
In the spot market, highest purity gold was sold at Rs 53,937 per 10 grams while silver was priced at Rs 66,131 per kg on Friday, according to the Indian Bullion and Jewellers Association.
The spot prices of gold have jumped about Rs 1,300 per 10 grams in the last two weeks, whereas silver has gained more than Rs 4,300 per kg during the same period under review.
On the macro front the ISM services PMI and factory orders came in better-than-expected supporting US dollar index recovery earlier in the previous week, said Ravindra Rao, CMT, EPAT VP-Head Commodity Research, Kotak Securities.
“Immediately following the US CPI data, the Federal Open Market Committee (FOMC) will conclude its two days meeting, the last for the year,” he said.
Trading Strategy
“Bullions charts are now showing some profit booking and looking overbought, Momentum Indicator RSI also indicating the same,” said Amit Khare, AVP- Research Commodities, Ganganagar Commodity. He advised traders to make fresh short positions.
He suggested selling gold and silver near given resistance levels at Rs 54,350-54,500 and Rs 68,500-69,000, respectively. He also advised profit booking near support levels at Rs 54,000-53,700 and Rs 67,200-66,000, respectively.
Global markets
Spot gold slipped 0.5% to $1,787.80 per ounce, as of 0302 GMT. US gold futures were down 0.6% at $1,799.60.
Spot silver lost 0.8% to $23.27, platinum fell 0.5% to $1,016.88 and palladium ticked 0.6% lower to $1,938.33.
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