Gold off Rs 4,775 per 10 gm from all-time highs; trade at Rs 75,000/10 gm
Sentiment in gold has taken a turn ahead of the key Fed officials speech and CPI print in the US later today.
Gold prices have been falling in the recent times as uncertainty around the Presidential elections in the US has taken sheen off the precious yellow-metals. Also after Trump's win safe-haven assets have got a boost, boosting appeal of the dollar, and gold herein took a backseat.
Gold price on MCX
After yesterday's slump, gold price have seen a mild recovery, with gold prices trading at Rs 75,000 per 10 gm, implying a significant cut of as much as Rs 4,775 from all-time high of Rs 79,775 per 10 gm.
Gold price in spot market
In the spot market as from the MCX site, Gold in Ahmedabad in the previous day's trade was at Rs 74,631 per 10 gm.
Gold prices slump 7% in international markets
After hitting new highs, gold prices are now down over 7 per cent in the international markets too with the spot price at the day's low at $2,597.65 per ounce.
Lesser aggressive rate cut path dents golds appeal
Dr. Renisha Chainani, Head Research - Augmont - Gold For All underscored that gold internationally broke the important support of $2600 and Silver almost touched $30.20 on stronger Dollar and US treasury yields on the expectation of slower rate cuts in the Trump administration.
Other reasons for pullback in yellow metal
Gold is declining because of the competition from alternative assets, like Bitcoin, which is reaching new all-time highs in the $90,000s due to predictions of laxer crypto regulation under the Trump administration equities are increasing as investors hope that reduced corporate taxes and looser regulations would improve business earnings.
Gold price outlook
Manoj Jain - Director- India Nivesh said Gold has support at $2584-2566, while resistance at $2622-2645 per troy ounce and silver has support at $30.45-30.20, while resistance is at $31.00-31.34 per troy ounce in today’s session. At MCX, gold is having support at 74640-74400 and resistance at 75220-75500 while silver is having support at 88500-88000 and resistance at 89950-90600. We suggest buying silver on dips around 89000 with a stop loss of 88200 for the target of 90500.
Substantial downside in the offing
Gold has achieved the first target of $2620 (~Rs 75000) and Silver has achieved the first target of $31 (~Rs 90,200). Prices could recover a bit today, but more weakness is expected up to $2565 in Gold and $29.80 in Silver in the next few days, adds Renisha.
Trump policies to give inflationary fillip
Trump's plan to strike tariffs on imports, slash taxes, and deport millions of illegal immigrants is expected to raise costs in the United States and drive up inflation. The US Federal Reserve will likely halt interest rate decreases to combat inflation.
Rate cut estimates trend lower
According to the CME FedWatch tool, market-based indicators now predict a 31% chance that the Fed will keep interest rates constant at their December meeting, down from a 100% chance of at least a quarter per cent drop.
Calling it a time correction, gold may see a bounce after todays US inflation print
Gold and silver markets are looking highly oversold and a dead cat bounce is expected in the markets after today’s inflation data, said Jain.