Gold prices traded higher at Rs 1,24,270 per 10 grams for the 5th December contract, rising Rs 357 or 0.29% in early trade. The metal persists in fluctuating within a volatile range, influenced by mixed global cues. Optimism surrounding potential Federal Reserve rate easing and a depreciating dollar index offers support, although recent profit-taking and a resurgence in equities have limited gains. Silver prices commenced robustly at Rs 1,55,481 per kg, reflecting an increase of Rs 794 or 0.51%, as market participants anticipate additional insights from inflation metrics and global risk appetite. In the international market, gold prices experienced an increase for the fourth consecutive session on Wednesday, buoyed by a depreciating dollar and anticipations that the reopening of the U.S. government, along with forthcoming economic data, will bolster expectations for a Federal Reserve interest rate cut in the upcoming month. Spot gold increased by 0.2% to $4,133.99 per ounce as of 0155, following a peak not seen since October 23 on Tuesday. U.S. gold futures for December delivery increased by 0.6%, reaching a price of $4,140.10 per ounce.
On Tuesday, gold and silver concluded the day with mixed results in both domestic and international markets. The December futures contract for gold concluded at Rs 1,23,913 per 10 grams, reflecting a decline of 0.05%, whereas the December futures contract for silver ended at Rs 1,54,687 per kilogram, showing an increase of 0.65%. Gold and silver exhibited significant volatility, initially extending their gains in early trading sessions; however, profit-taking at elevated levels subsequently negated those earlier gains. Gold prices declined from three-week peaks as the prospect of a resolution to the U.S. government shutdown emerged alongside a recovery in global equity markets. “However, possible Fed monetary policy easing and weakness in the dollar index could support gold and silver prices,” stated Manoj Kumar Jain.
“Gold maintains its critical threshold of $3,870 and has surpassed $4,100 per troy ounce, while silver also sustains its essential support level of $45.50 per troy ounce and has exceeded $50 per troy ounce, demonstrating notable strength,” he added. The dollar index was positioned near a level not seen in over a week, thereby enhancing the appeal of gold for holders of alternative currencies. Today, the US Dollar Index was hovering near the 99.50 mark, gaining 0.02 or 0.02%.
“We anticipate fluctuations in gold and silver prices this week, influenced by instability in the dollar index and the broader global financial markets, particularly in advance of the U.S. inflation data. Gold is projected to trade within the range of $3,960-4,220 per troy ounce, while silver is expected to fluctuate between $47.00-52.50 per troy ounce this week,” Jain stated.