• Weakening of the pace of monetary tightening by central banks and the prospect of a pullback in the US dollar have helped to lift gold prices this month.
Tracking a similar trend in global markets, gold prices in India rose for the second consecutive day. On MCX, gold futures climbed above ₹53,000 per 10 gram, while silver remained flat at ₹62,800 per kg. Traders remained cautious ahead of Federal Reserve Chairman Jerome Powell's speech later today for more clues into the US central bank's monetary policy path. Gold prices in India are up nearly 5% or ₹2,500 per 10 grams - the second best month of the year - but are still down nearly ₹3,000 from August 2020's all-time high of ₹56,200.
The weakening of the pace of monetary tightening by central banks and the prospect of a pullback in the US dollar have helped lift gold prices this month.
In global markets, spot gold was up 0.2% at $1,752.95 an ounce. Spot silver slipped 0.1% to $21.23. Gold was supported by a weakening of the dollar index, making bullion less expensive for other currency holders. Powell's speech is scheduled for 1830 GMT at the Brookings Institution event.
Ravindra V. Rao, CMT, EPAT, VP-Head Commodity Research, Kotak Securities, though gold closed higher yesterday, it remained range-bound as traders watched important US economic data print as well as Fed Chair Powell's speech were waiting for
"US dollar index is also range bound in the range of 107-106 after recovery from lower levels. This year is set to be the best month for gold as expectations of a small rate hike by the Fed at its upcoming meetings have supported the yellow metal. Traders are looking forward to the Fed Chairman's speech as it will indicate more on the Fed's stance on the US economy and future monetary policy. The next three days will be crucial for the precious metal amid important data prints like US Q3 preliminary GDP, ISM Manufacturing PMI and NFP report."
Analysts will also be watching the Covid scenario in China, the world's biggest gold consumer. The gradual lifting of restrictions in China is likely to boost jewelery demand. Data released today showed that China's factory activity contracted at a sharp pace in November, an official survey showed, weighed down by softening global demand and COVID-19 restrictions.
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