Gold prices declined in early trading on Monday, November 17, as investors realized profits after a significant global rally this year, coupled with hawkish remarks from U.S. Federal Reserve officials that moderated expectations for a rate cut in December. On the Multi Commodity Exchange, gold futures for December delivery decreased by Rs 420 or 0.34%, currently trading at Rs 1,23,141 per 10 grams. Ongoing concerns regarding inflation, coupled with indications of resilience in the U.S. labor market—even following two interest rate reductions this year—have led numerous Federal Reserve officials to adopt a prudent stance towards additional monetary easing. The Federal Reserve reduced interest rates by 25 basis points in the previous month; however, Chair Jerome Powell indicated a cautious stance regarding further reductions, citing a lack of substantial incoming data.
In the international market, Gold prices experienced a slight increase on Monday as investors anticipated a series of U.S. economic data releases scheduled for this week, which may offer more definitive insights into the Federal Reserve’s forthcoming rate path. Spot gold experienced a modest increase of 0.1%, reaching $4,083.92 per ounce as of 0256, whereas U.S. gold futures for December delivery saw a slight decline of 0.2%, settling at $4,085.30 per ounce. The dollar index remained stable against major currencies, rendering bullion comparatively less attractive for holders of alternative currencies. Platinum increased by 0.7% to $1,552.36, whereas palladium rose by 1.7% to $1,408.13.
Gold, as a non-interest-bearing asset, generally gains appeal in low-rate environments and during times of economic distress. In the interim, the resumption of U.S. government operations following an unprecedented 43-day shutdown alleviated certain investor anxieties and reinstated the regular dissemination of economic indicators. What strategies should one employ when trading gold? “Gold prices remained subdued following yesterday’s evening sell-off, as remarks from Federal Reserve officials indicating that the absence of new economic data might postpone additional rate cuts negatively impacted sentiment in bullion,” stated Jateen Trivedi.
The dollar index exhibited strength, thereby exerting further pressure on gold. Prices have decreased from this week’s peak of Rs 1,27,000 to Rs 1,25,600, yet they maintain a weekly increase of approximately 4%. Gold is anticipated to exhibit volatility, oscillating between Rs 1,24,000 and Rs 1,27,500.