Gold Price Today: Investors try to absorb US Fed's hawkish stance; resistance for yellow metal at resistance at Rs 48,350

Gold prices in the international market traded on a positive note on December 16 as the market took into stride the US Fed's hawkish tone related to bond purchase taper and interest rate hikes.

At 9.30 am, the gold contracts in India were up 0.51 percent trading at Rs 48,330 for 10 grams on the Multi-Commodity Exchange (MCX), on December 16. Silver futures also opened on a positive note and were up 1.92 percent at Rs 61,365 a kilogram.

The precious metals ended mixed on December 15 amid weakness in the rupee.

On the Multi-Commodity Exchange (MCX), the gold traded in a narrow range of Rs 47,950 and Rs 48,250 on Wednesday. At close, it ended flat at Rs 48,078 per 10 grams with a marginal gain of Rs 6 (+0.01 percent). Earlier it had opened at Rs 48,039 and made a day’s low of Rs 47,950 and day’s high of Rs 48,240.

Silver, on the other hand, ended lower by Rs 584 (-0.96percent) at Rs 60,234 per 10 grams. During the day it made a high of Rs 60,984 and the low was at Rs 60,050.

In the international markets, Gold and silver slipped again amid double tapering and three potential rate hikes in 2022 by the U.S. Federal Reserves.
Prices of Gold remained supported in the previous trading session due to weaker retail sales data from the US, said Abhishek Chauhan, Head of Commodity & Currency at Swastika Investmart.

The Fed policy sounds hawkish, keeping the faster taper of asset purchases to $30bn/mth and expecting 3 hikes in 2022.

“As the event is out, we may expect some short covering where Gold has resistance at 48,350. Above that 48,600 levels can be seen having support at 47,900. Silver has support at 59,800 and resistance at 61,000”, Chauhan added.

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Manoj Kumar Jain, Prithvi Finmart Commodity Research

Gold February futures contract were settled at $1764.50 per troy ounce with a loss of 0.44percent and silver March futures contract were settled at $21.55 per troy ounce with a loss of 1.71percent. The U.S. Federal Reserve left interest rates unchanged in this policy meeting but looking to the further increase in the inflation and improvements in the job markets, Fed decided to reduce its monthly net asset purchases by $20 billion for treasury and $10 billion for mortgage backed securities. Ten members of the Fed Open Market (FOMC) committee see three potential rate hikes in 2022 while five members see two rate hikes.

The dollar index crossed 96.60 marks during the session but cooled off after downbeat U.S. retail sales data. Gold and silver prices also plunged due to hawkish Fed but prices were supported at lower levels due to downbeat U.S. economic data and rising global inflation.

Gold is strongly holding its key support level of $1,750 per troy ounce in the international markets. We expect gold and silver prices could show dead cat bounce after FOMC meeting outcomes and gold could test $1,800 per troy ounce again. Gold is having support at $1,752-1,738 per troy ounce and resistance at $1,778-1,792 per troy ounce; silver is having support at $21.40-21.14 per troy ounce and resistance at $21.84-22.10 per troy ounce.

In the domestic markets, Gold February futures contract were settled at 48,087 per 10 gram with a minor gain of 0.03percent and silver March futures contract were settled at 60,208 per one kilogram with a loss of 1.00percent. At MCX, gold is having support at 47,880-47,750 and resistance at 48,220-48,380; silver is having support at 59,800-59,500 and resistance at 60,700-61,100. We suggest buying gold above 48,100 with a stop loss of 47,880 for the target of 48,400 and silver above 60,300 with a stop loss of 59,800 for the target of 61,100.

Ravindra Rao, CMT, EPAT, VP- Head Commodity Research at Kotak Securities

COMEX gold trades about 1percent higher near $1783/oz as US dollar index weakened in reaction to Fed’s monetary policy decision. Fed took a hawkish stance to control inflation however market reaction was subdued as the move was well anticipated and as Fed maintained an open ended approach amid persisting risks to the economy from virus spread. Gold has bounced back after taking support near $1750/oz and as market players took Fed decision in stride however monetary tightening tilt of major central banks is negative for gold and may keep pressure on prices

Dr. Ravi Singh, Vice President & Head of Research, ShareIndia

Fed decided to taper the bond tapering with double pace and end it in early 2022 and faster rate hikes. However, their bullishness about the US economy and employment has comforted the traders. These factors will definitely put a pressure on Gold prices but it’s expected to be in sideways zone as the fear of Omicron is still riding the markets.

Buy Zone Above - 48100 for the target of 48350
Sell Zone Below - 47900 for the target of 47600