Gold, Silver Prices On November 22: How Prices Of Precious Metals Are Performing And Their Outlook?

Precious metals like gold and silver are likely to perform volatile on Wednesday, after a strong upside in the previous session. The price of yellow metal is likely to find support to around Rs 60,980 per 10 grams today, while its resistance could be between Rs 61,300 to Rs 61,550 per 10 grams. Meanwhile, silver prices are seen to find support around RS 72,259 per 1 kg, and its resistance could reach Rs 74,500 levels.

MCX gold futures expiring on December 5, fell by Rs 150 or 0.24% to trade at Rs 61,075 per 10 grams. The bullion ranged from Rs 61,070 to Rs 61,159 per 10 grams in the opening bell.

Meanwhile, silver futures traded lower by Rs 254 or 0.35% to Rs 73,050 per 1 kg. This pristine metal ranged from Rs 73,024 to Rs 73,150 per 1 kg.

In the early trade, spot gold in London and US gold futures pulled back from their $2000 mark. Spot gold traded at $1,996.79 an ounce, marginally down from its previous session's print where it touched a 3-week high. Also, US futures performed at $1,998.10 an ounce, down by 0.2%.

The US gold futures day's range is between $1,997.30 - 2,001.85 an ounce.

This is due to the recovery in the dollar index against a basket of world currencies after US Federal Reserve comments in minutes of the meeting hinted at cautiousness and less probability of a rate cut in the near term as the inflation rate is still well above their target of 2%.

FOMC minutes said, "Inflation abroad remained elevated. While core inflation continued to ease amid slowing aggregate demand, energy price inflation increased in many foreign economies. With inflation still high, most major foreign central banks, while keeping their policy rates unchanged, indicated their intentions to hold these rates at sufficiently restrictive levels to bring inflation back to target rates."

Further, FOMC said, "All participants agreed that the Committee was in a position to proceed carefully and that policy decisions at every meeting would continue to be based on the totality of incoming information and its implications for the economic outlook as well as the balance of risks. Participants noted that further tightening of monetary policy would be appropriate if incoming information indicated that progress toward the Committee's inflation objective was insufficient."

Giving gold and silver outlook for Wednesday, Rahul Kalantri, VP of Commodities, Mehta Equities said, "U.S. Federal Reserve indicated in its November month meeting minutes, released on Tuesday, a potential for maintaining higher interest rates for a longer period, which could potentially limit the gains of precious metals. A pause in further rate hikes, however, could provide support for gold and silver prices."

He added, "We anticipate that gold and silver prices will remain volatile in today's session. Gold has support at $1981-1968, with resistance at $2008-2021. Meanwhile, silver has support at $23.55-23.40 and resistance at $24.10-23.25. In INR, gold has support at Rs60,980-60,760, and resistance at Rs 61,380, 61,510. Silver has support at Rs72,250-70,880, with resistance at Rs 73,870 to 74,430."

In the previous session, spot gold surged to cross over the $2,000 per ounce mark, on expectations that the Federal Reserve is likely to convey a dovish outlook in its November policy minutes meeting. With hopes of the peak in the rate hike cycle, the dollar index weakened against a basket of currencies, coupled with a decline in bond yields which worked in favour of safe haven assets like yellow metal.

Mehta said, "Gold prices surged, reaching a three-week pinnacle and reclaiming the $2,000 mark on Tuesday. Simultaneously, silver prices also experienced significant gains. The upswing in precious metals was driven by futures traders covering short positions, along with discouraging data on U.S. home sales and leading economic indicators unveiled yesterday."

Yesterday, the spot gold jumped to hit its highest level since November 3rd at $2,007.29 per ounce, while US gold futures climbed to $2,008.90 per ounce. Whereas the dollar index dropped to over two-and-half month low, and the US 10-year Treasury yields slipped to a two-months low.

When the dollar is down, yellow metal and silver become attractive and cheaper for other currency holders.

Also, Reuters reported on Tuesday that Swiss gold exports in October rose to their highest level since May as deliveries to India surged to meet demand during the country's festive season, customs data showed.

However, the news agency cited a government source who said that India's October gold imports surged 60% from a year earlier to a 31-month high as a drop in prices ahead of a key festival prompted jewellers to ramp up purchases.

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