• Strong US economic data, released on Thursday, weighed on gold prices
After hitting a nine-month high earlier this week, gold prices in the Indian markets declined for the second day today. On MCX, gold futures fell 0.12% to ₹54,440 per 10 gram, down nearly ₹1,000 from its nine-month high of ₹55,250 hit earlier this week. Silver futures rose 0.3% to ₹68,750 per kg. In global markets, sporting gold was flat as traders remained cautious ahead of US economic data due later in the day to gauge the Federal Reserve's rate hike stance.
Spot gold was little changed at $1,792.80 an ounce. US Personal Consumption Expenditure (PCE) data, which will signal on inflation, is due later today. Among other precious metals, spot silver rose 0.3% to $23.63.
Gold prices fell sharply on Thursday after data showed new claims for US unemployment benefits rose less than expected last week, while the economy improved sharply in the third quarter, expanding by a previously estimated 2.9%. The comparison had increased by 3.2%.
Although gold is considered a hedge against inflation and economic uncertainties, interest rates increase the opportunity cost of holding bullion as it does not yield any interest.
“Gold and silver prices declined sharply on Thursday as bullion felt the heat following stronger-than-expected US Q3 GDP number announcement. Weekly US jobless claims did not rise as much as economists were expecting. Better-than-expected US economic data raised fears of a further Fed rate hike in 2023 and supported the dollar index and pushed precious metals lower," said Rahul Kalantri, VP Commodities, Mehta Equities Ltd.
"We expect bullion prices to remain volatile in today's session. Gold has taken support at $1784-1772 while resistance lies at $1812-1822. Silver has taken support at $23.42-23.25, while resistance at $23.88-1822. At $24.05. In rupee terms, gold has support at ₹54,150-53,850, while resistance lies at ₹54,620, 54,780. Silver has taken support at ₹67,850-67,380, while resistance at ₹68,920-69,480. "
Traders in China, the world's biggest consumer of gold, are also closely monitoring the Covid situation.
“Since China is the largest consumer of gold – lockdown conditions in China, demand during Chinese New Year in February and Golden Week in October will push the prices. Trade tensions between the US and China is another big factor that will affect the prices. could." Geopolitical tensions between Ukraine-Russia, recession in the West, volatility in the dollar index, and gold buying programs by global central banks will guide the larger price trajectory for gold and silver in 2023.
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