Gold Rates In The International Markets Rising Significantly, Reached $1828/oz: See Why

Price range

Gold prices in the international markets have crossed the $1825/oz level in spot market and futures markets, majority influenced by inflation concerns, globally. In the Comex December futures, gold rates reached at $1828/oz level and closed at $1823.8/oz till last traded. Along with that, in the spot market gold rates reached $1827.8/oz level, while quoted at $1823.6/oz, till last traded on November 9.

Breaks anticipation before tapering announcement

Breaking all previous anticipation of a fall in gold rates after the tapering announcement, gold rates kept hiking globally. Hence, the Indian market too got impacted by that trend, and rates increased by Rs. 810 in a single day on November 8. For a very long time, US Federal Reserve is trying to keep the inflation rate at 2% but failed. Inflation reached 30 years high range recently. Investors are finding it difficult to deny the precious metal, and the demand for gold is increasing interestingly.

Hedge against inflation

Gold has been considered as a hedge against inflation, and the present gold rate trend is an example of the same. Previously in 2020, at the peak time of the pandemic, gold rates gained massively and crossed a historically high level of $2000/oz. At the end of 2021, the same trend is being observed and the rates are expected to increase more, till any interest rate hike by the US Fed.

However, not only the US Fed, but all major central banks of Asian and European countries are not quite ready for an interest rate hike any time soon. So, the gold rates are not anticipated to fall significantly now. A weaker US dollar index, firmer crude oil prices, and falling US government bond yields on this first trading day of the week and of the month have also impacted the rising gold rates. Now, the 10-year US Treasury yield is fetching 1.45%.

Expert's opinion

Amit Khare, AVP- Research Commodities, Ganganagar Commodity Limited told Goodreturns.in, "It was very busy data last week for the markets. The Federal Reserve announced tapering of its asset purchases and the U.S. economy added more than 500,000 jobs in October. Rising inflation pressures and central banks that are in no hurry to raise interest rates are boosting sentiment in the gold market as prices look to end the last week above $1,800 an ounce."

Khare added, "Yesterday we saw good buying in Bullions at lower levels, Which may continue for next few trading sessions, As per technical chart both metals are ready for upside movement, Momentum indicator RSI also indicating the same on the daily chart, So traders are advised to make fresh buy positions in Gold and Silver in small dips, traders should focus important technical levels given below for the day:

December Gold closing price 47972, Support 1 - 47700, Support 2 - 47500, Resistance 1 - 48200, Resistance 2 - 48400.

December Silver closing price 64332, Support 1 - 64000, Support 2 - 63500, Resistance 1 - 65000, Resistance 2 - 65650."

On November 9, gold rates in the Mumbai MCX, quoted at Rs. 48,006/10 grams, till 9.29 AM IST, and 22 carat gold price in India quoted at Rs. 47,030/10 grams.