Gold Prices Today: Precious metals to edge higher as US dollar weakens, buy on dips

Gold prices were little changed on Wednesday in the international markets near a one-month high hit in the previous session, while focus shifts to US inflation data due later this week.

Spot gold was 0.1 percent down at $1,709.80 per ounce, as of 0050 GMT. US gold futures fell 0.1 percent to $1,714.10.

At 9:52 am, gold contracts were trading 0.16 percent higher on the Multi-Commodity Exchange (MCX) at Rs 51,545 for 10 grams and silver was down 0.36 percent at Rs 61,735 a kilogram.

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Gold and silver prices on Tuesday settled on a positive note in the international markets. Gold December futures contract settled at $1,716.00 per troy ounce, up by 2.11% and silver December futures contract settled at $21.50 per troy ounce, up by 2.78%. Domestic markets also settled on a positive note.

We expect the dollar index to remain under pressure and could support precious metals. Any decline in the prices would be good buying opportunity in gold and silver. Gold has support at $1700-1684, while resistance at $1730-1744 per troy ounce. Silver has support at $21.20-20.88., while resistance is at $21.80-22.00 per troy ounce. At MCX, gold has support at Rs 51400-51220 and resistance at Rs 51850-52080 while silver has support at Rs 61300-60660 and resistance at Rs 62500-63200. We suggest buying silver on dips around Rs 61500 with a stop loss of Rs 60800 on a closing basis for target of Rs 63000.

Precious metals soared yesterday due to US congressional election. The IBD/TIPP Economic Optimism Index fell 1.2 points to 40.4 in November. The economic pessimism during the midterm election day increases the uncertainty that ramps up the haven demand. Day trend in precious metals may remain upside. Gold has resistance at Rs 52000 and support at Rs 51000. Silver has resistance at Rs 63000 and support at Rs 61800.

Gold prices settled above the $1700 level for the first time in one month. Gold looks more appealing in a scenario of a weaker dollar and lower treasury yields. Overall, recessionary concerns, the US midterm election result, and concerns over US economic confidence data cemented the case of a lower terminal rate hike by Fed, which served as a key positive catalyst for gold.

Now the focus will be on CPI data, which is due on Thursday. Elsewhere, investors are closely tracking policy signals from China on whether it is considering dialing back its zero-Covid policy. China is the world’s second-largest market for gold jewelry next to India. Presently, gold is trying to settle above $1720. In case the attempt is successful, the yellow metal may rally towards $1750/$1780 by this week.