Gold prices inched lower on Tuesday in the international markets, as a firmer dollar and expectations of more rate hikes from the US Federal Reserve dented the non-yielding bullion's appeal.
Spot gold was down 0.1% at $1,784.98 per ounce as of 0024 GMT. US gold futures were down 0.2% at $1,794.70.
At 10:32 am, gold contracts were trading 0.26 percent higher on the Multi Commodity Exchange (MCX) at Rs 54,401 for 10 grams. Silver shed 0.09 percent at Rs 67,451 a kilogram.
Manoj Kumar Jain, Prithvi Finmart Commodity Research
Gold and silver prices on December 19 settled on a weaker note in the international markets. Gold February futures contract settled at $1,797.70 per troy ounce, down by 0.29% and silver March futures contract settled at $23.20 per troy ounce, down by 0.90%. Domestic markets also settled on a weaker note.
We expect rate hike fears and fear of global economic recession continuing to keep both precious metals volatile. Gold could test its support level of $1776 per troy ounce and silver could test $22.84 per troy ounce levels once again. Gold has support at $1788-1776, while resistance is at $1810-1822 per troy ounce. Silver has support at $22.84-22.55, while resistance is at $23.50-23.80 per troy ounce.
At MCX, gold has support at Rs 54100-53920 and resistance at Rs 54400-54550 while silver has support at Rs 67100-66660 and resistance at Rs 67900-68250. We suggest selling gold on rise around Rs 54400 with a stop loss of Rs 54580 for target of Rs 54000.
Prathamesh Mallya, AVP- Research, Non-Agri Commodities, and Currencies, Angel One
Gold prices on Monday began the week on a lower note, continuing the weakness from the previous sessions, as prices settled 0.27 percent lower at $1787.4 per ounce. The outlook for the non-yielding bullion continued to be clouded by a stronger dollar and persistent concerns about additional rate increases from the US Federal Reserve, which put pressure on the price of yellow metal.
The likelihood of a higher Fed rate could limit gold's upward movement, as Fed Chair Jerome Powell stated last week, the US central bank would continue to raise interest rates in order to combat inflation in 2019. Despite being regarded as an inflation hedge, gold seems to have a higher opportunity cost when interest rates are higher.
We expect gold to trade lower towards Rs 53950 levels, a break of which could prompt the price to move lower to Rs 53730 levels.
(With agency inputs)
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