Gold prices surge by Rs 1,200/10g, and the rally may not be over yet. Here’s why it may be time to accumulate
Gold prices traded sharply higher on Monday, with the MCX December futures jumping over 1% or by Rs 1,223 to Rs 1,22,290 per 10 grams, amid renewed safe-haven demand following weak U.S. consumer sentiment data and a soft jobs report.
Additionally, silver futures opened strong on the MCX, rising by Rs 2,872 or 1.94% to Rs 1,50,600 per kilogram. The white metal mirrored gold’s upward momentum, which was also supported by safe-haven demand.
Internationally, spot gold gained 0.7% to $4,027.88 per ounce by 0115 GMT. U.S. gold futures for December delivery rose 0.7% to $4,036.60 per ounce.
The U.S. economy shed jobs in October amid losses in the government and retail sectors, while cost-cutting and artificial intelligence (AI) adoption by businesses led to a surge in announced layoffs, data showed last week.
U.S. consumer sentiment weakened to its lowest level in nearly 3-1/2 years in early November amid worries about the economic fallout from the longest ever U.S. government shutdown, a survey showed on Friday. This supported safe-haven buying for precious metals.
Market participants now see a 67% chance of a December Fed rate cut, according to the CME FedWatch Tool. Non-yielding gold tends to do well in a low-interest-rate environment and during economic uncertainties.On Friday, gold and silver settled on a positive note in the domestic and international markets. Gold December futures contract settled at Rs 1,21,067 per 10 grams with a gain of 0.38% and silver December futures contract settled at Rs 1,47,728 per kilogram with a gain of 0.45%.Gold and silver show very high price volatility and recovered from lower levels amid downbeat U.S. consumer sentiment data and uncertainty in the ending of the U.S. shutdown.
The dollar index also slipped from their highs due to the U.S. shutdown and supporting gold and silver prices. Today, the US Dollar Index, DXY, was hovering near the 99.64 mark, gaining 0.04 or 0.04%.
“Gold is holding its make-or-break level of $3,870 and silver is also holding its support level of $45.50 per troy ounce on a weekly closing basis. We expect gold and silver prices to remain volatile this week amid volatility in the dollar index, volatility in the global financial markets, ahead of the U.S. inflation data and uncertainty on the ending U.S. shutdown and gold are expected to trade in the range of $3,870-4,140 per troy ounce and silver is expected to trade in the range of $45.50-50.50 per troy ounce this week,” said Manoj Kumar Jain of Prithvifinmart Commodity Research.
How to trade gold?
Manoj Kumar Jain suggested the following ranges for gold and silver on MCX:
- Gold has support at Rs 1,20,550-1,20,100 and resistance at Rs 1,21,660-1,22,200
- Silver has support at Rs 1,46,800-1,45,500 and resistance at Rs 1,49,200-1,50,150
Jain suggests buying gold and silver on dips until they hold their support levels of Rs 1,17,700 and Rs 1,44,000, respectively, on a daily closing basis.
Gold rates in physical markets
Gold Price today in Delhi
Standard gold (22 carat) prices in Delhi stand at Rs 91,840/8 grams while pure gold (24 carat) prices stand at Rs 98,712/8 grams.
Gold Price today in Mumbai
Standard gold (22 carat) prices in Mumbai stand at Rs 90,840/8 grams while pure gold (24 carat) prices stand at Rs 97,616/8 grams.
Gold Price today in Chennai
Standard gold (22 carat) prices in Chennai stand at Rs 90,400/8 grams while pure gold (24 carat) prices stand at Rs 97,152/8 grams.
Gold Price today in Hyderabad
Standard gold (22 carat) prices in Hyderabad stand at Rs 90,520/8 grams while pure gold (24 carat) prices stand at Rs 97,280/8 grams.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)