Gold To Trade Sideways In The Near Term; Bullish Sentiment For 2021

Gold prices on Friday gained by a margin on the MCX in the futures market to Rs. 49046 per 10 gm. This is as the concerns on US stimulus, rising unemployment in the US as well as Brexit deadlock weighed.

This is even as ECB stimulus was announced in the previous session.

Also, what pushed up the gold prices is dollar which was pulled back to 2.5 year low.

Gold To Trade Sideways In The Near Term; Bullish Sentiment For 2021

In the Mumbai retail market though gains in the dollar and moderate global cues, pulled gold prices lower to Rs. 49046 per 10gm. For some time now in the near to medium term, gold shall witness choppiness and trend in a range.

For the week, gold prices have declined only marginally after gaining as much as in the first week of December.

Factors supporting gold price

Weaker dollar which has gained by a tad

Disappointing US economic data

ECB's monetary easing

Rising virus cases

Brexit uncertainty

Iincreased US-China tensions

Outlook for gold price

"..Weighing on price is vaccine progress and lack of ETF buying. Gold may struggle for direction amid mixed cues, however, vaccine optimism and US stimulus delay may keep the pressure on prices. Technically, $1,823 would act as good resistance, until that holds, it will be difficult for the bears to hold it lower for longer," said Rao. VP- Head Commodity Research, Kotak Securities.

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