On Wednesday, along with general upward momentum stemming from renewed speculation regarding a potential rate increase from the Fed, demand remained strong across the country and led to improved demand for Gold across North America.
Gold for December delivery was priced as high as $125,665 in India shortly after 10:00 am. Additionally, Silver for December delivery reached $157,750 in India, gaining 0.91%.
In Mumbai, gold prices rose. The price of 24-carat gold reached Rs. 12,791 per gram, up from Rs. 12,704 the day before, while 10 grams traded at Rs. 1,27,910, compared to Rs. 1,27,040 the previous day.
Similarly, 22-carat gold increased to Rs. 11,725 per gram from Rs. 11,645, and the price of 10 grams of gold reached Rs. 1,17,250 from Rs. 1,16,450.
Gold prices rose in Chennai. The 24-carat price increased from Rs. 12,786 per gram on Tuesday to Rs. 12,873 per gram, and for 10 grams, from Rs. 1,27,860 to Rs. 1,28,730.
The same applies for 22-carat gold, with prices marginally increasing to Rs. 11,800 per gram today from Rs. 11,720 per gram, and 10 grams up from Rs. 1,17,200 to Rs. 1,18,000.
Due to increasing downward pressure on the U. S. Dollar and an increase in demand for Gold, the US Treasury's bond prices are still decreasing to near monthly lows.
With increased future rate expectations, Gold’s International spot price was also boosted to its highest level in the previous two months on Wednesday.
There are many reasons why this would be the case; one major reason is that a decrease in dollar strength typically increases investor interest in purchasing Gold, which increases its value.
In addition to this, the US Producer Price Index increased by an anticipated amount of 0.3% in September; however, this announcement was delayed due to the recent 43-day government shutdown.
At the same time diplomatic efforts were still being undertaken to reduce some political tensions between Russia and Ukraine, although since then, for many months, there has continued to be a drop in demand for Gold arising out of lower risk associated with Gold as Safe Haven Demand.
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Globally, gold prices should find support around $4,100-$4,065, and resistance around $4,170 and $4,195.
Similarly, silver will likely find support near the $51 and $50.65 area, with resistance between the $51.85- $52.20 area.
On MCX, gold has support between Rs. 1,26,100-Rs. 1,25,500 and potential resistance between Rs. 1,27,550-Rs. 1,28,200.
Silver may attract buying interest near Rs. 1,58,800-Rs. 1,57,500, and if momentum continues, the metal could move toward Rs. 1,61,500-Rs. 1,63,000.