Gold rates witnessed a significant rise, reaching a record high of ₹77,641 per 10 grams in the domestic futures market on Friday morning. This surge was fueled by positive global signals and strong demand from domestic spot markets.
MCX Gold for December 5 expiry was trading 0.62% higher at ₹77,587 per 10 grams around 9:40 am. Positive global cues have bolstered sentiment in the domestic market. In international markets, gold prices have increased by over 1% this month and approached record highs on Friday, driven by uncertainty regarding the outcome of the 2024 US election, tensions in West Asia, and expectations of further monetary easing. Spot gold reached a record high of $2,696.59 on Thursday.
The dovish outlook of the US Federal Reserve and other major central banks, including the European Central Bank (ECB), has significantly contributed to the recent rise in gold prices. Additionally, ongoing tensions in West Asia and uncertainty surrounding the US election have further heightened investors’ interest in gold as a safe-haven asset.
Media reports indicate that the 2024 US presidential election is shaping up to be a closely contested race between former President Donald Trump and current Vice President Kamala Harris.
On the geopolitical front, there seems to be no end in sight for the conflict in West Asia.
“Hamas leader Yahya Sinwar, who was a mastermind of last year’s October 7 attack that triggered the Gaza war, has been killed by Israeli forces. Western leaders said his death offered an opportunity for the war to end, but Israeli Prime Minister Benjamin Netanyahu said it would continue,” As per the media report.
“Lebanon’s Hezbollah militant group said it will escalate war with Israel while Iran also said “the spirit of resistance will be strengthened” after Hamas leader Hamas leader Yahya Sinwar was killed,” as per the media sources.
As anticipated, the ECB lowered rates for the third time this year on Thursday, stating that inflation in the eurozone is increasingly under control. Conversely, US economic data indicates that the world’s largest economy remains robust, fueling speculation that the Fed may delay interest rate cuts.
“Data showed US retail sales rose a stronger-than-expected 0.4 per cent last month after an unrevised 0.1 per cent gain in August. A separate report showed initial jobless claims dropped by 19,000 to a seasonally adjusted 241,000 last week,” reported Reuters.
According to CME Group’s FedWatch Tool, traders now perceive a 73.6% likelihood of a 50 basis point rate cut in the Federal Reserve’s remaining meetings this November and December. Gold typically appreciates during periods of lower interest rates and amid economic and global uncertainty.
Key levels to watch for MCX Gold
Jateen Trivedi, VP and Research Analyst for Commodity and Currency at LKP Securities, stated that the gold rally is driven by increasing uncertainty in the returns on risky assets, positioning gold as an appealing investment choice for investors.
“The ongoing geopolitical tensions in West Asia, coupled with expectations of further interest rate cuts, continue to support the upward momentum in gold prices,” said Trivedi.
“The precious metal has strong support near ₹76,300- ₹76,500 on MCX, which should provide a cushion during any minor corrections. On the upside, resistance is now seen extending toward ₹77,250- ₹77,450, with the potential for further gains if safe-haven demand persists. As global uncertainties remain elevated, gold could continue to see buying interest in the near term,” Trivedi said.
According to Rahul Kalantri, VP of commodities at Mehta Equities, gold has key support levels at $2,674-$2,660, with resistance at $2,712-$2,728. Silver has support at $31.62-$31.45, while resistance lies at $32.15-$32.37.
In the Indian rupee terms, Kalantri said gold has support at ₹76,900- ₹76,640 and resistance at ₹77,280- ₹77,500, while silver’s support is at ₹91,050- ₹90,350, with resistance at ₹92,280- ₹93,080.
Manoj Kumar Jain of Prithvifinmart Commodity Research underscored gold has support at $2,692-2,674, while resistance at $2,722-2,740 per troy ounce and silver has support at $31.50-31.20, while resistance is at $32.00-32.35 per troy ounce in today’s session.
On the MCX, Jain said gold has support at ₹76,850-76,600 and resistance at ₹77,350-77,550, while silver has support at ₹91,100-90,450 and resistance at ₹92,400-93,000.
“We suggest buying gold on dips around ₹76,900 with a stop loss of ₹76,600 for the target of ₹77,500 and also suggest buying silver around ₹91,500 with a stop loss of ₹90,800 for the target of ₹93,000,” said Jain.
Disclaimer:
(The views and recommendations above are those of individual analysts, experts, and brokerage firms, not We advise investors to consult certified experts before making any investment decisions.)