Gold Prices Today: Yellow metal loses shine as dollar gathers strength, experts advise caution

Gold, gold prices

Gold prices retreated in the international markets on Monday from a three-week high scaled in the previous session, as the US dollar regained some ground, making bullion more expensive for overseas buyers.

Spot gold was down 0.5 percent at $1,672.30 per ounce, as of 0025 GMT. Bullion prices surged 3 percent on Friday as the dollar fell nearly 2 percent after US jobs data raised hopes about the US Federal Reserve being less aggressive on rate hikes going forward. US gold futures were flat at $1,676.10.

At 10.13 am, gold contracts were trading 0.19 percent higher on the Multi-Commodity Exchange (MCX) at Rs 50,961 for 10 grams and silver was down 0.33 percent at Rs 60,338 a kilogram.

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

Gold gained on Friday reversing the entire week loss and closing the week with solid gains. COMEX Gold gained by 1.93% on weekly closing basis. Gold was under pressure in the first few sessions weighed down by Fed’s hawkish stance and persistent decline in SPDR gold holdings to fresh 31-month lows. However, Fridays fall in US Dollar after mixed mix payrolls report that indicated slowing pace in job additions supported the yellow metal that rose to three weeks high of $1686.4/oz.

Focus will now turn to the inflation data from US and China due to be released in the week. Consensus is for a moderation of US CPI to 8 percent annually. Any print that is more than the expectation might cause traders to increase expectations that the Fed’s aggressive stance would continue and that would be positive for US Dollar and weak for gold and vice versa.

Deveya Gaglani, Research Analyst, Axis Securities

Gold prices rallied higher on Friday due to correction in dollar index and decline in bond yields supported the bullions prices as investors absorb the monetary policy outlook. Prices are stuck in a trading range between $1610 and $1680 from the past month, which indicate indecisiveness amongst participants regarding the direction. The current Non-farm data showed that the US labour market remains resilient, with better than expected data of 261K, reinforcing the case for the Fed to follow its tightening plans. On the other hand, given the jobless rate rising above forecasts, investors also consider that aggressive tightening is not required.

Last week , the central bank delivered its fourth straight 75 basis point rate hike and Fed Chair said interest rates would need to go higher than initially anticipated and that it is 'premature to discuss pausing'. Now focus will be on the December Fed meet. In the domestic market gold needs to close and sustain above Rs 51000 level to enter into bullish territory or else it will trade in a range between Rs 51000 and Rs 49800 level this week.

Rahul Kalantri, VP Commodities, Mehta Equities

Gold and silver prices surged on Friday following the US jobs report clarified some of the Federal Reserve's mixed messages, and China signaled a possible easing of its Covid-Zero policy. But investors are advised to exercise caution as the recent previous rallies have been used as selling opportunities.

Gold has support at $1661-1650, while resistance is at $1684-1691. Silver has support at $20.35-20.10, while resistance is at $20.82-21.05. In rupee terms gold has support at Rs 50,520-50,350, while resistance is at Rs 50,980, 51,140. Silver has support at Rs 59,480-58,860, while resistance is at Rs 60,980–61,510.

Jigar Trivedi, Senior Research Analyst - Commodity & Currency at Reliance Securities

Comex Gold prices on Monday morning eased toward $1,670 an ounce, retreating from a three-week high reached in the previous session as the dollar rebounded slightly from Friday's slump, making greenback-priced bullion more expensive for buyers holding other currencies.

Investors also continued to assess the outlook for US interest rates, while looking ahead to a key US inflation report this week that could influence the size of an expected Federal Reserve rate hike in December. Markets are currently betting that the Fed will slow the pace of rate increases by delivering a 50 basis point rate hike next month after raising interest rates by an outsized 75 basis point in the last four meetings.

However, a hot inflation print would likely fuel bets for a larger 75 basis point increase, supporting the dollar while pressuring gold. We expect MCX Gold December futures to stay in a range from Rs 50,850 to 51,100 per 10 gram.

(With agency inputs)

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