Gold, Silver Prices: Yellow Metal Slips, 18-24 Carat Gold Get Cheaper; What Will Drive Bullion This Week?

The prices of gold and silver slipped on Monday as international prices dived with the dollar index firming ahead of several major central banks meeting and US inflation data. Last week, gold and silver touched a new lifetime high, however, could not sustain their momentum. That being said, yellow metal recorded its first weekly drop in four weeks. This week, the bearish tone is likely to float above bullions.

Gold, Silver Prices December 11, 2023:

22-carat gold dropped by Rs 200 in 10 grams to Rs 56,950 on Monday, compared to the previous day's Rs 57,150 per 10 grams. While 1 gram to 100 grams of 22-carat gold was cheaper by Rs 20 to Rs 2,000.

Meanwhile, 10 grams in a 24-carat dropped by Rs 220 to Rs 62,130 as against Rs 62,350 the previous day. Prices of 1 gram to 100 grams of 24-carat fell by Rs 22 to Rs 2,200.

As for 18-carat gold, the price of 10-gram dipped by Rs 160 to Rs 46,600 as against Rs 46,760. 1 gram to 100 grams here was lower by Rs 16 to Rs 1,600 from the previous day.

Unlike gold, the decline in silver prices was mild. 1 kg of silver was down by Rs 200 to Rs 75,800 from the previous day of Rs 76,000. 1 gram to 100 grams of silver is also tumbled by Rs 0.20 to Rs 20.

At MCX, gold price with February expiry traded at Rs 61,570 per 10 grams, down by Rs 149 or 0.24%. Also, silver prices with March expiry slipped marginally by Rs 46 or 0.06% to Rs 72,472 in 1 kg.

US inflation data along with central bank meetings are likely to give clarity on the Fed's interest rates prospects ahead. Spot gold on Monday is down by 0.6% to trade at $1,995.19 an ounce, while US gold futures are struggling to hold $2,000 an ounce level and have slipped to an intraday low of $2,007 an ounce.

Rahul Kalantri, VP of Commodities, Mehta Equities said, "The gold and silver markets experienced notable selling pressure last week due to the U.S. economy surpassing job addition expectations and a rebound in the dollar index, exerting pressure on precious metals. U.S. nonfarm payrolls increased by 199,000 last month, exceeding the estimated 184,000. Simultaneously, the U.S. unemployment rate dropped to 3.7%, down from October's 3.9%. The dollar index rebounded following better-than-expected U.S. job data, leading to a decline in gold and silver prices."

Kalantri added, "Traders also took profits in anticipation of upcoming U.S. Federal Reserve meetings. Anticipating continued volatility in today's session, gold finds support at $1988-1976 with resistance at $2018-2027. Silver's support is at $22.82-22.68, and resistance is at $23.20-23.34. In INR, gold has support at Rs61,570-61,410, with resistance at Rs 61,980 and Rs 62,170. Silver's support is at Rs72,050-71,480, and resistance is at Rs73,270 and Rs73,930."

Gold, Silver Prices Weekly Outlook:

As per SMC Global Securities, gold experienced its first weekly decline in four weeks as the dollar strengthened. Despite maintaining stability, the precious metal faced uncertainty ahead of crucial U.S. job data, crucial for assessing the likelihood of a Federal Reserve rate cut in March. After reaching a record high of $2,135.40, driven by expectations of a Fed rate cut, gold plummeted by over $100 due to uncertainty surrounding the timing of the cut. The dollar index (DXY) was set to break a three-week losing streak, rendering gold more expensive for holders of other currencies.

The brokerage further added, "Although gold retained robust support above the $2,006 per ounce level, the potential for a rate cut might jeopardize this support if U.S. payroll data exceeds expectations. Concerns arose about the U.S. labor market losing momentum gradually, influenced by higher borrowing costs dampening demand across the broader economy."

It pointed out that traders eagerly awaited the U.S. non-farm payrolls report for November, anticipating an addition of 180,000 jobs. Market sentiment suggested a 65% probability of a rate cut as early as March, according to CME's FedWatch Tool. In contrast, a Reuters poll indicated expectations of unchanged rates until at least July.

Giving its weekly outlook for December 11th to 15th, SMC's note said, on the Comex, gold struggled to sustain levels above its previous resistance of $2,080, with potential support around $1,980. Silver displayed a bearish bias, with expected support near $21.80 and
resistance at $25.60. Looking ahead, on MCX, gold prices might face selling pressure, finding support around 61,000 and resistance near 63,700. Silver charts indicated ongoing weakness, with a bearish momentum and a probable trading range of 72,900 to 76,000.

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.