Gold, Silver Prices Weekly Outlook: Yellow Metal May Range From Rs 60,500-64,500 Per 10 Grams, Here's Why!

Prices of precious metals are steady. Last week, both gold and silver logged weekly gains on the backdrop of a decline in dollar and treasury yields, thanks to the US Federal Reserve's hinting at three rate cuts in 2024. Currently, the 24-carat gold price in India is at Rs 62,510 per 10 grams, while MCX gold futures with February expiry are slightly shy of the Rs 62,100 mark. Further, spot gold in London had jumped to around $2,050 an ounce.

In the trading week from December 18th to 22nd, gold prices are expected to range from Rs 60,500 to Rs 64,500 per 10 grams, and silver is expected to range from Rs 73,000 to Rs 77,000 per 1 kg.

On Sunday, the 24-carat gold price remained unchanged in 10 grams to Rs 62,510, while prices of 22-carat and 18-carat in the same grams also stood at Rs 57,300 and Es 46,880 respectively. Also, silver prices in 1 kg were at Rs 77,700, unchanged from the previous day.

Meanwhile, MCX gold futures with February expiry stood at Rs 62,077 per 10 grams, slightly down by Rs 115 or 0.18% last week on Friday, as compared to the previous session's print of Rs 62,192. Also, silver prices with March expiry dipped by Rs 110 or 0.15% to Rs 74,415 per 1 kg over the previous session.

Spot gold reached near $2,045 an ounce by end of the last week. While US gold futures came near $2,060 an ounce.

Prices of precious metals got a boost after the US Federal Reserve decided to maintain the target range for the federal funds rate at 5-1/4 to 5-1/2 per cent. Key Fed rates are kept at a 22-year high for the third consecutive policy. This was in line with expectations. However, the uplifting factor for commodities traders was that the Fed also hinted at multiple rate cuts in 2024.

The FOMC led by chair Jerome Powell expects three rate cuts in 2024. Fed seeks to achieve maximum employment and inflation at the rate of 2% over the longer run. In support of these goals.

Notably, lowering policy rates usually tend to make haven assets like gold attractive in overseas market.

What to expect this week?

In its research note, SMC Global Securities said, "Despite the Fed keeping the key interest rate unchanged at 5.5%, dovish remarks hinted at the possibility of three cuts in 2024, leading to a rebound in commodities. Gold and silver are expected to trade in a range of 60500-64500 and 73000-77000, respectively."

The brokerage explained that gold recorded weekly gains as the dollar and Treasury yields weakened following the US Federal Reserve's decision to maintain interest rates and signal three rate reductions in 2024 due to a faster-than-expected drop in inflation. Fed Chair Jerome Powell hinted at an impending discussion on cutting borrowing costs, contributing to market expectations of a 75% chance of a rate cut in March. Despite stronger US retail sales and a decline in weekly jobless claims, these positive indicators did little to alter expectations of an impending rate cut.

Further, it said, seventeen of 19 Fed officials projected lower interest rates by the end of 2024. Simultaneously, the European Central Bank and the Bank of England held their policy rates steady, committing to maintaining elevated levels to address inflation concerns.

Accordingly, SMC's note said, the dollar
was on track for a weekly decline after reaching a four-month low, making gold
more affordable for holders of other currencies. The benchmark US 10-year bond
yield remained near its lowest level since July. Chinese data showed industrial
production grew more than expected in November, indicating that some aspects of
the economy were recovering. However, readings on retail sales and fixed asset investment missed expectations.

Going ahead, SMC's note said, ". The next trend will be determined by a breakout on either side of this range. Silver displayed a bullish outlook on charts, with potential support near $22.65 and resistance around $25.00. Looking ahead, on MCX, gold prices are expected to maintain a bullish bias, with a potential trading range of 61000-63900, while silver may trade within the range of 71500-77000 in the coming week."

Disclaimer: The recommendations made above are by market analysts and are not advised by either the author nor Greynium Information Technologies. The author, nor the brokerage firm nor Greynium would be liable for any losses caused as a result of decisions based on this write-up. Goodreturns.in advises users to consult with certified experts before making any investment decision.