Gold Price Today Rises but Still Rs 8,600 Down from All-Time High. Is it Time to Buy?

Gold price in India jumped significantly on Friday, December 3, following the global cue. On the Multi-Commodity Exchange (MCX), the gold contracts were up 0.36 per cent to Rs 47,570 for 10 grams at 11 am on December 3. Silver price also witnessed a jump on Friday. The precious metal futures were also up 0.25 per cent to Rs 61,275 a kilogram.

However, the yellow metal remained under pressure in the international market. A hawkish stance of US Federal Reserve on stimulus tapering and rising interest rate pushed gold for a third straight weekly drop in the global market. Spot gold price jumped 0.2 per cent to $1,772.41 per ounce by 0439 GMT. US gold futures gained 0.6 per cent to $1,773.30, according to Reuters data. The safe-haven metal had declined 1.1 per cent so far in the week.

Rising cases of the Omicron variant globally continued to drive volatility across markets, however gold traders were more focussed on inflation and the Fed. US Federal Reserve Bank of Atlanta President Raphael Bostic told that it would be appropriate to end the central bank’s bond-buying programme by the end of March, allowing the Fed to raise rates. The number of Americans filing new claims for unemployment benefits increased less than expected last week, pointing to tightening labour market conditions, while layoffs tumbled to the lowest level in 28-1/2 years in November.

“The Fed’s recent policy shift i.e. increased bets on early interest rate hikes and the idea that inflation fears are going to be falling weighed on bullion. The recent fall in crude oil prices could help on the inflation side of things. SPDR Gold Trust fund, said its holdings fell about 0.5 per cent to 986.17 tonnes on Thursday from Wednesday. International spot gold prices have started flat to marginally higher this Friday morning in Asian trade however, upside remained capped weighed down by signals from Federal Reserve officials that the central bank could end its pandemic-era asset purchases and raise interest rates faster than expected to combat surging inflation. Technically, if COMEX Gold February sustains below $1770.00 level, it could continue to witness a bearish momentum up to $1754.85-$1747.00 levels. Resistance is at $1777.85-$1793.00 levels,” said Sriram Iyer, senior research analyst at Reliance Securities.

“Domestic gold prices could start flat to marginally higher this Friday morning. Technically, if MCX Gold February trades below Rs 47,500 level, it could continue its negative trend up to Rs 47,223-47,045 levels. Resistance zone is at Rs 47,705-Rs 48,010 levels. International spot silver prices have started flat this Friday morning in Asian trade,” Iyer added.

“Technically, if COMEX Silver March trade below $22.345 level, it could witness a bearish momentum up to $22.185-$22.055 levels. Resistance zone is at $22.475-$22.635 levels. Domestic silver prices could start flat this Friday morning. Technically, if MCX Silver March trades below Rs 61,120 level, it could witness a bullish momentum up to Rs 60,756-60,389 levels. Resistance zone is at Rs 61,485-61,847 levels,” he further mentioned.

Commenting on the factors impacting yellow metal price this week, Amit khare, AVP- research commodities, Ganganagar Commodity Limited said, “The near-term chart posture for the gold market is deteriorating now, and that has invited some technical-based sellers into the market. Also, weak-handed longs in the gold futures markets are being forced to liquidate their positions amid the recent sell off. A slumping crude oil market this week is also a negative for the metals markets. February gold was last down $17.20 at $1,767.30 and March Comex silver was last up $0.036 at $22.375 an ounce.”

“The key ‘outside markets’ see Nymex crude oil prices higher and trading around $66.50 a barrel, after hitting a three-month low of $62.43 today. The US dollar index is slightly lower. Meantime, The yield on the US Treasury 10-year note is presently fetching 1.456 per cent,” he said.

Investors will await the non-farm payroll number due on Friday. Apart from the jobs data, the PMI numbers in Europe and the US could also drive the markets on December 3.