• US inflation data and Fed policy coming this week and gold traders are likely to be cautious ahead of the announcements
Gold rates in India fell today after hitting a 9-month high in the previous week. On MCX, gold futures slipped 0.3% to ₹54,121 per 10 grams, while silver declined 0.4% to ₹67,781 per kg, tracking soft global rates. The yellow metal had hit a nine-month high of ₹54,400 on Friday.
In global markets, gold slipped 0.5% to $1,787.80 an ounce today as the dollar index rose 0.3%. A stronger greenback makes dollar-denominated bullion more expensive for overseas buyers. US inflation data and Fed policy are due this week and traders are likely to be cautious ahead of the announcements. Besides this, the European Central Bank (ECB) and the Bank of England (BoE) are also set to announce their rate decisions this week.
Among other precious metals, spot silver fell 0.8% to $23.27 today, platinum by 0.5% to $1,016.88 and palladium by 0.6% to $1,938.33.
"Several important data/events are lined up this week. We are likely to see a lot of two-sided price action and volatility across asset classes. We have US November CPI on Tuesday, US Fed rate decision on Wednesday," IFA Global said in a note. Late evening is followed by the ECB and BoE rate decisions.
Jatin Trivedi, VP Research Analyst at LKP Securities, said: "Going forward, Fed policy will be the next trigger for gold prices which could take a range of $1,770 - $1,825".
Most traders expect the Fed to go for a 50-basis-point rate hike. Gold may benefit from a slower rate hike. Low interest rates boost the appeal of gold because it reduces the opportunity cost of holding non-yielding bullion.
Kotak Securities said in a note that though gold did well in November with a gain of 7.25%, investment demand remained subdued amid Fed's aggressive monetary tightening stance.
Analysts say though gold has seen a rally in the last two months, further upside may remain capped.
"US interest rates are still not at their peak. The Fed may well continue to raise rates in 2023 as inflation is still at 8%, and is far from the 2% target. Other global central Rate hike by banks may also put a cap on the upside in gold prices. Also, in a rising dollar scenario, it is less likely that gold will be able to move higher. Yellow may be beneficial for the metal. But that will happen sometime from now," MK said in a recent note.
No comments:
Post a Comment