Gold trades steady ahead of key Fed policy outcome

Tracking gold prices in the international market, gold futures on the Multi Commodity Exchange (February contract) in trade on Wednesday (December 13, 2023) traded marginally lower ahead of the key US Fed verdict on the policy rate due later today. At 10:56 am, MCX gold traded 0.12 per cent or Rs 75 lower at Rs 61,106 per 10 gm. 
Meanwhile, March silver futures traded lower by Rs 212 or 0.3 per cent at Rs 71,650 per kg.

In the international market, on Comex, gold futures were trading at $1994.3, up by a marginal 0.06 per cent. 

The dollar index (DXY) was down $0.01 or 0.01% against a basket of six top currencies and hovering around 103.85. 

Earlier this month amid bets that the US Federal Reserve will resort to rate cutting as early as March 2024, gold climbed new highs of over $2100 per ounce. Nevertheless,  over the past week, gold drifted sharply lower from new highs amid resilience in the US economy which signalled that the Fed can continue to keep interest rates higher for longer. High rates in the economy are negative for non-interesting yielding yellow metal.

"An increase in U.S. core inflation and better than expected U.S. job data pressurized gold and silver in the international markets. Gold and silver also plunged amid sell-off in crude oil and gains in global equity markets. Improving risk-appetite and gains in riskier asset classes also eased safe-haven demand of precious metals. We expect gold and silver prices to remain volatile this week amid volatility in the dollar index and the U.S. Fed policy meeting outcomes," Manoj Kumar Jain, Head-Commodity and Currency Research at Prithvi Finmart said. 

"Gold and silver is having key support at $1980 and $22.55 per troy ounce respectively in the international markets on a weekly closing basis if slipped below this level could show further weakness in the upcoming sessions. Gold has support at $1980-1966, while resistance at $2004-2022 per troy ounce and silver has support at $22.80-22.55, while resistance is at $23.30-23.50 per troy ounce in today’s session. At mcx, gold is having support at 61000-60770 and resistance at 61440-61650 while silver is having support at 71400-70850 and resistance at 72350-72800. We suggest selling gold on rise around 61440 with a stop loss of 61660 for the target of 60950," he added.

Intraday Trading Strategy by Amit Khare Associate Vice President at Ganganagar Commodity Limited (GCL) Broking

– Buy MCX FEBRUARY Gold futures at Rs 61050 with a stop loss of Rs 60800 and a price target of Rs 61550
– Buy MCX MARCH Silver futures at Rs 71600 with a stop loss of Rs 71100 and a price target of Rs 72700