Gold touches new high of Rs. 62,602 amid weakening Dollar
What's the story
Gold prices soared to new heights today on the Multi Commodity Exchange (MCX), with the gold futures contract opening at Rs. 62,602 per 10g levels.
However, prices soon dipped due to profit-taking.
Anuj Gupta, Head of Commodity & Currency at HDFC Securities, linked the gold and silver prices surge to the ongoing weakness in the US Dollar and falling US 10-year bond yield.
Details
US Dollar index hits three-month low
The US Dollar index has hit a three-month low, while the US 10-year bond yield is nearing 4% levels after previously reaching 5%.
Praveen Singh, Associate VP of Fundamental Currencies and Commodities at Sharekhan by BNP Paribas, stated that gold prices increased due to a drop in US yields.
This is because traders interpreted Fedspeak as confirmation of their belief in peak Fed rate followed by rapid rate cuts.
What Next?
Federal Reserve Governor's remarks impact gold prices
US Federal Reserve Governor Christopher J Waller expressed confidence that the present monetary policy is well-suited to slow the economy and bring inflation back to 2%.
He also mentioned the possibility of reducing policy rates if inflation declines for several months.
Singh observed that Waller's remarks impacted yields and subsequently the US Dollar Index, which closed with a loss of 0.46% at 102.73.
Insights
Key levels for gold and silver prices on MCX
Gupta from HDFC Securities pointed out that the current spot gold price is in the $2,030 to $2,060 per ounce range, with further bullish or bearish trends depending on whether the price breaks out of this range.
On MCX, gold price faces resistance at Rs. 62,800 per 10g levels, with strong support at Rs. 62,000 per 10g levels.
Meanwhile, silver price on MCX is in the Rs. 73,000 to Rs. 75,500 per kg range.
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A look at gold and silver futures prices
On the MCX, gold futures climbed 2.37% or Rs. 1,445 per 10g on a month-to-date and 13.39% (Rs. 7,368) on a year-to-date (YTD) basis, respectively.
On the other hand, silver futures rose Rs. 3,630 (5.06%) in value terms in November, and witnessed a growth of 8.48% (Rs. 5,886) on a YTD basis.