In the upcoming trading week from December 25th to 29th, both gold and silver markets are expected to witness fluctuations following two consecutive weeks of gains. Analysts project potential pullbacks influenced by evolving factors in the financial landscape.
In the bullion sector, MCX gold prices are forecasted to oscillate within the range of Rs 61,500 to Rs 63,500 per 10 grams, while silver is expected to maintain a narrow spread between Rs 74,000 and Rs 77,000 per 1 kg. The recent surge in precious metal values can be attributed to growing expectations of a Federal Reserve rate cut in 2024, weakening the dollar and bolstering the appeal of safe-haven assets.
As of the latest update, 22-carat gold is priced at Rs 58,200 for 10 grams, with 24-carat and 18-carat variants at Rs 63,490 and Rs 47,620, respectively. Meanwhile, MCX gold prices, with February expiry, closed marginally higher at Rs 62,972 per 10 grams last week, while silver prices with March expiry edged up to Rs 75,448 per 1 kg.
The surge in international prices, driven by a weakening dollar and declining treasury yields, influenced the uptick in MCX gold and silver prices. Market sentiments are currently factoring in potential rate cuts by both the Federal Reserve and the Reserve Bank of India (RBI) in 2024.
Gold prices in London recently surged to $2,070.61 an ounce, with US gold futures for February reaching $2,083 an ounce. The future trajectory of precious metals remains uncertain, prompting investors to analyze market dynamics closely.
According to SMC Global Securities, the CRB index experienced a slight uptick, attributed to a continued decline in the dollar and positive economic developments. The Dollar Index declined significantly from 107 in October 2023 to 101.5, triggered by indications of impending rate cuts in 2024.
SMC Global Securities’ note for the week suggests that gold and silver are poised for range trading, with gold fluctuating between Rs 61,500 and Rs 63,500 and silver between Rs 74,000 and Rs 77,000. The note underscores the second consecutive week of gains for gold, driven by a substantial drop in the dollar and Treasury yields.
Traders are increasingly betting on potential US Federal Reserve interest rate cuts in the coming year. Recent data indicates that US economic growth in the third quarter fell below expectations, contributing to a lower dollar index and heightening gold’s appeal. Additionally, US 10-year bond yields are hovering near their lowest point since July.
Investors are closely watching Friday’s US core PCE reading, the Federal Reserve’s preferred inflation gauge, for insights into the monetary policy outlook. Market participants are currently pricing in an 83% probability of a US rate cut by March, according to the CME FedWatch tool.
While gold prices on MCX are expected to fluctuate between Rs 61,500 and Rs 63,400, silver may trade in the range of Rs 73,200 to Rs 77,400, as per SMC’s projections. It is essential to note that these recommendations are based on market analysis and readers are advised to consult certified experts before making investment decisions.
