Gold prices saw a slight uptick in the domestic futures market on Tuesday, December 24, 2024, driven by positive global market indicators. However, gains were tempered by the US dollar’s strength and rising bond yields.
US Dollar and Bond Yields Cap Gains
In the morning session, gold prices edged higher in India as the market reacted to encouraging global signals. Still, the US dollar, which held near a two-year high, limited the yellow metal’s rise. The surge in US Treasury yields further pressured the price of gold.
According to Reuters, the rise in the dollar was fueled by stronger-than-expected US Treasury yields. This kept investors wary of significant gains in the precious metal, despite the optimistic global outlook. International markets also weighed in, with gold prices climbing as speculation about the US Federal Reserve easing off on interest rate cuts next year continued to circulate.
The February futures contract for gold ended the previous session with a small loss of 0.36% at ₹76,144 per 10 grams. This came despite a weaker consumer confidence report from the US and mixed economic data that should have supported demand for safe-haven assets like gold.
Consumer Confidence Impact and Safe-Haven Demand
The drop in the US consumer confidence index in December, which fell to 104.7 from the previous month’s 112.8, added to economic concerns. Yet, despite the decline, the report failed to ignite a significant increase in safe-haven demand for precious metals like gold.
Manoj Kumar Jain, a commodity analyst at Prithvifinmart Commodity Research, noted that while the holiday season slump in consumer confidence raised worries about the economy, it wasn’t enough to fuel strong buying in gold. The yellow metal’s appeal as a safe haven remained under pressure as investors focused more on the US dollar and rising bond yields.
Additionally, global equity markets faced a dip, and the Fed’s hawkish stance on interest rates had a dampening effect. Although these factors created a mixed outlook, there was some positive movement in gold and silver prices, driven by bargain-hunting and reduced geopolitical tensions.
Expert Strategy for MCX Gold
Looking at the Indian futures market, Jain offered some insights on strategies for trading MCX Gold. He suggested buying gold around ₹76,000, with a stop-loss at ₹75,770 and a target of ₹76,500. For silver, he recommended a buy near ₹88,650 with a stop loss of ₹88,100, aiming for a target of ₹89,800.
Experts expect that the gold market will continue to be influenced by external factors such as geopolitical tensions and bond market movements. Therefore, traders must stay vigilant, watching for any shifts in the US dollar or Treasury yields that could lead to volatility.
International Price Levels and Key Support
On the international front, gold prices saw moderate fluctuations. Support levels for gold were observed at $2,614 to $2,600 per troy ounce, while resistance was at $2,644 to $2,658. Silver prices had similar levels, with support at $29.88 to $29.55 and resistance at $30.50 to $30.84 per troy ounce.
In the MCX market, gold prices have key support levels at ₹75,920 to ₹75,650, and resistance levels range from ₹76,440 to ₹76,700. Silver support is found between ₹88,450 and ₹87,700, with resistance levels ranging from ₹89,900 to ₹90,500.
Traders looking to capitalize on these levels should monitor the fluctuations closely, as they will provide crucial insights into where the market may be headed in the short term.