Gold prices held steady on Tuesday (December 3) as investors awaited key US economic data, which could provide clues about the Federal Reserve’s interest rate decisions. Spot gold was little changed at $2,638.73 per ounce, while US gold futures edged up by 0.1%, reaching $2,661.10.
In India, gold prices have seen significant fluctuations.
Today, 22-carat gold costs ₹7,130 per gram, while 24-carat gold is priced at ₹7,778 per gram, according to Goodreturns data.
Price trend: Volatility continues
Gold prices experienced volatility, slipping as much as 1% on Monday (December 2) before stabilising. The recent fluctuations are largely due to market uncertainty surrounding the US Federal Reserve’s monetary policy, with upcoming US economic reports expected to influence the next rate moves.
The focus is on this week’s key US data, including job openings, the ADP employment report on Wednesday (December 4), and the payrolls report on Friday (December 6).
“Gold is facing mixed signals as traders weigh a likely rate cut against stronger economic data,” said Kyle Rodda, a financial analyst at Capital.com.
Comments from Fed officials, including Governor Christopher Waller, have fueled expectations of a rate cut in December, driving the market’s cautious approach.
Outlook: Rate cut expectations and geopolitical tensions
The outlook for gold
remains tied to the trajectory of US interest rates. The market is currently pricing in a 75% probability of a 25 basis points rate cut at the Fed’s December meeting.
A lower interest rate environment generally benefits gold, as the opportunity cost of holding the metal decreases.
“Gold tends to thrive in periods of low interest rates and during geopolitical uncertainty,” noted Renisha Chainani, Head of Research at Augmont.
Geopolitical risks, particularly the ongoing tensions between Russia and Ukraine, and the situation in Israel and Iran, could further support gold as a safe-haven asset.
Gold prices are expected to continue fluctuating within a range, with support at $2,600 per ounce (₹75,000 per 10 grams) and resistance at $2,650 per ounce to $2,664 per ounce.
Investment insight: Volatility creates opportunities
For investors, the current market volatility presents both risks and opportunities.
While short-term price movements remain unpredictable, the longer-term outlook for gold remains positive due to expectations of further Fed rate cuts and geopolitical tensions.
In India, the approaching wedding season, a key gold-buying period, is expected to keep demand strong, despite the recent price correction.
Colin Shah, MD of Kama Jewelry, explained, “The recent correction in gold prices is largely driven by a rally in the US Dollar Index and diminishing expectations of further Fed rate cuts. However, gold remains a favored asset, especially in India, where sentimental value plays a significant role in driving demand during festive seasons.”
–With agencies inputs
Content retrieved from: https://www.cnbctv18.com/personal-finance/gold-prices-rise-india-rates-factors-outlook-buy-hold-sell-investment-19518471.htm.
