Gold Prices Slip Amid Profit Booking; Market Eyes US Federal Reserve Policy Move
On Thursday, November 27, gold and silver prices experienced a decline in early trading on the Multi Commodity Exchange (MCX), pulled down by profit booking following recent gains. Market participants remain closely watchful of the upcoming US Federal Reserve monetary policy decision scheduled for December, which continues to exert a strong influence on precious metal dynamics.
At around 9:10 am IST, MCX Gold December futures were trading 0.36% lower at ₹1,25,480 per 10 grams, while MCX Silver December contracts edged down 0.20% to ₹1,60,950 per kilogram.
US Economic Data Fuels Speculation Over Fed Rate Cut
The anticipated Federal Open Market Committee (FOMC) meeting on December 9-10 is drawing intense market focus. Investors are digesting recent US economic data suggesting a mixed outlook. Notably, retail sales in the US grew at a slower-than-expected rate in September, with reports indicating a 0.2% month-on-month increase, down from August’s 0.6%. Additionally, consumer confidence in November has fallen to its lowest point since April.
The Producer Price Index (PPI) also showed a 0.3% increase in September, aligning with forecasts but underscoring inflation’s persistence. Taken together, these data points have fueled speculation of a potential interest rate cut by the Fed in December. According to the CME FedWatch tool, traders currently price in an approximately 85% probability of such a move.
Currency Movements and Market Sentiment
Despite the dip in gold prices, declines were capped due to a softer US dollar. The dollar index slipped 0.10%, which tends to support gold demand by making the metal more affordable for holders of other currencies. The interplay between the dollar’s trajectory and gold prices remains a key factor to watch in the near term.
Expert Views: Key Price Levels and Volatility Expectations
Market analysts are expecting a week of volatility in gold and silver prices, driven by fluctuations in the US dollar and pending key macroeconomic releases from Europe.
Manoj Kumar Jain of Prithvifinmart Commodity Research anticipates gold trading within the range of $4,040 to $4,270 per troy ounce this week, with silver moving between $50.00 and $54.70 per troy ounce. For today’s session, Jain identified support levels for gold at $4,164 and $4,140, with resistance at $4,240 and $4,270. For silver, support is seen at $52.20 and $51.70, while resistance is pegged at $53.40 and $54.00. On the MCX front, Jain highlighted gold support at ₹1,27,000 and ₹1,26,350, resistance at ₹1,28,200 and ₹1,29,100. Silver support lies at ₹1,63,300 and ₹1,62,000, with resistance at ₹1,67,700 and ₹1,70,000. Jain recommends a cautious buying strategy for gold around ₹1,27,000, with a stop loss below ₹1,26,300, targeting upward levels of ₹1,28,200 to ₹1,29,000. For silver, buying around ₹1,63,500 to ₹1,62,000 with a stop loss below ₹1,60,600 is advised, aiming for targets between ₹1,67,700 and ₹1,70,000. Rahul Kalantri, Vice President of Commodities at Mehta Equities, echoed similar sentiments. He placed gold’s support at $4,130 and $4,095, with resistance at $4,195 and $4,225. For silver, he pointed to support at $52.65 and $52.35 and resistance at $53.65 and $53.90. In Indian Rupees, Kalantri sees gold’s support at ₹1,25,350 and ₹1,24,780, and resistance at ₹1,26,650 and ₹1,27,100. Silver support and resistance levels are at ₹1,60,350 and ₹1,59,600, and ₹1,62,110 and ₹1,63,000 respectively.
Looking Ahead
As the market approaches the critical FOMC meeting and anticipates further economic data from Europe, investors are advised to be prepared for continued volatility in precious metal prices. Market experts underscore the importance of monitoring key support and resistance levels to navigate the uncertain environment effectively.
Disclaimer: This article is intended for educational purposes only. The views and recommendations expressed are those of individual analysts and do not constitute financial advice. Investors should consult with certified financial advisors before making investment decisions, as market conditions can change rapidly.
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