Gold prices saw a major slip in early trade on Thursday as traders booked profits after the recent rally. Market participants also shifted focus to the upcoming US Federal Reserve policy meeting scheduled for December 9-10, keeping volatility elevated across global metal markets.
On the MCX, Gold December futures traded 0.36% lower at Rs. 1,25,480 per 10 grams around 9:00 am, while Silver December futures were down 0.20% at Rs. 1,60,950 per kg.
In Mumbai, gold prices remained flat with just a Rs. 1 per gram change from yesterday. The price of 24-carat gold is Rs. 12,792 per gram from Rs. 12,791 a day earlier, while 10 grams traded at Rs. 1,27,920 compared to yesterday’s Rs. 1,27,910.
Meanwhile, 22-carat gold saw a major decline to Rs. 11,726 per gram from Rs. 11,725. The 10-gram value dropped to Rs. 1,17,260 from Rs. 1,17,250.
In Chennai, gold prices fell. The price of 24-carat gold dropped to Rs. 12,840 per gram compared to Rs. 12,873 a day earlier. On the other hand, 10 grams traded at Rs. 1,28,400 compared to Rs. 1,28,730 yesterday.
22-carat gold also slipped to Rs. 11,770 per gram from Rs. 11,800, with the 10-gram price easing to Rs. 1,17,700 from Rs. 1,18,000.
Recent economic indicators, including softer retail sales data, cooling consumer confidence, and an in-line Producer Price Index (PPI), have boosted the expectations of a rate cut in December.
The CME FedWatch Tool now shows an 85% probability of a rate reduction, and it undoubtedly adds support to bullion.
A marginally weaker US dollar, with the dollar index down 0.10%, also helped limit the downside. We all know a softer dollar makes gold cheaper for overseas buyers.
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According to Manoj Kumar Jain of Prithvifinmart Commodity Research, gold has support at $4,164 and $4,140. The resistance lies at $4,240 and $4,270 per ounce. He also noted that silver’s support levels are positioned at $52.20 and $51.70, with resistance expected at $53.40 and $54.
On the MCX, gold has support at Rs. 1,27,000 and Rs. 1,26,350, while resistance is placed at Rs. 1,28,200 and Rs. 1,29,100. Silver finds support at Rs. 1,63,300 and Rs. 1,62,000, whereas resistance levels are located at Rs. 1,67,700 and Rs. 1,70,000.
Jain has recommended buying gold near Rs. 1,27,000 with a stop loss at Rs. 1,26,300 for upside targets between Rs. 1,28,200 and Rs. 1,29,000.