Gold Prices: The past two days haven’t been particularly good for gold enthusiasts. On Friday, December 19th, gold prices fell for the second consecutive day, primarily due to the strengthening of the US dollar.
When the dollar strengthens, buying gold in other currencies becomes more expensive. Despite this, gold is poised to close higher this week as recent US economic data has renewed investors’ hopes of a Federal Reserve interest rate cut.
Gold Status on MCX
The February gold futures contract on MCX opened 0.30% lower at ₹1,34,031 per 10 grams, down from the previous close of ₹1,34,521. The day’s low was reached at ₹1,33,555, resulting in a total decline of ₹966 in gold prices. However, gold has gained 0.13% for the week, and if it closes higher, it will mark its sixth consecutive week of gains.
Performance of Spot Gold and Silver
Spot gold fell 0.53% to an intraday low of $4,327 per ounce, but later recovered slightly to trade at $4,329 per ounce.
Silver, meanwhile, strengthened from its previous decline. The March silver futures contract opened at ₹2,02,899 per kg on MCX and reached an intraday high of ₹2,06,280, registering a gain of ₹3,390.
Dollar Index and Impact of US Economic Data
The US Dollar Index, which measures the dollar against six major currencies, reached a one-week high of 98.74. This reflected the dollar’s strength, marking its first weekly gain in three weeks.
The US Consumer Price Index rose by a lower-than-expected 2.7% in November, slowing compared to the same period last year. This figure represents a significant decline after a 3% increase in September. This relatively low inflation data boosted investor confidence that the Fed will continue to cut interest rates next year. According to the CME FedWatch Tool, there is a 58% chance the Fed will adopt a dovish policy in March.
Goldman Sachs’ Forecast
Goldman Sachs has offered a more optimistic outlook. The global brokerage firm estimates that gold prices could continue this record run and reach $4,900 per ounce by December 2026. This is supported by strong demand from central banks and interest rate cuts by the Fed.
Technical Analysis and Expert Opinion
According to technical analysis, experts say that gold will continue to fluctuate in the range of ₹1,31,500–₹1,34,000 in the near future. According to Jatin Trivedi, VP and Research Analyst, LKP Securities, “A strong dollar is offsetting global strength. The market is now looking at US existing home sales and the Core PCE Price Index, which could provide a new direction for prices.”
According to Rahul Kalantri, VP Commodities, Mehta Equities, gold support is at ₹1,33,850–₹1,33,110 and resistance is at ₹1,35,350–₹1,35,970. Silver support is at ₹2,02,450–₹2,00,280 and resistance is at ₹2,05,810–₹2,07,270.
F&Q
Q1: Why did gold prices fall recently?
A1: The US dollar’s strength and dollar-denominated gold prices led to a decline in prices.
Q2: Will gold close higher this week?
A2: The trend throughout the week is positive, and if it closes higher at the end of the week, it will be the sixth consecutive week of gains.
Q3: Why did silver prices rise?
A3: Improved investor demand and market recovery after the previous decline pushed silver higher.
Q4: What is considered a safe range for investing in gold and silver?
A4: According to experts, gold may remain in the range of ₹1,31,500–₹1,34,000 and silver in the range of ₹2,02,450–₹2,07,270.
Disclaimer: This article is for informational purposes only. Consult a personal financial advisor before investing.
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