1 week ago
Gold prices remain near one-month low on Tuesday (November 12), reflecting investor caution as they await crucial US economic data and commentary from Federal Reserve officials. Spot gold slipped by 0.1% to $2,617.15 per ounce by 0436 GMT, marking its lowest point since October 10.
US gold futures showed a slight uptick, rising 0.2% to $2,623.30 per ounce.
In India, gold prices held steady.
The cost of 24-carat gold stood at ₹7,893.3 per gram, while 22-carat gold was priced at ₹7,237.3 per gram.
Over the past week, 24-carat gold has gained 1.24%, but the metal has dipped 2.14% month-on-month.
Dollar surge and inflation concerns
The US dollar, which has strengthened in recent days, remained near a four-month high. Investors continue to favor the greenback in light of the economic policies anticipated under President-elect Donald Trump.
The dollar's rise has made gold less attractive to holders of other currencies.
"Gold has succumbed to the purple patch of the US dollar in the aftermath of the election. Trump's policies appear to be a boon for the dollar, which, combined with potential inflationary pressures, could slow the Fed’s rate-cutting trajectory in 2025," Tim Waterer, Chief Market Analyst at KCM Trade was quoted as saying in a Reuters report.
Renisha Chainani, Head of Research at Augmont - Gold For All, noted that "Trump's expansionary plans and corporate tax cuts may put upward pressure on inflation, limiting the Federal Reserve's ability to loosen monetary policy further. This continues to support the greenback, pressuring gold prices."
Gold is traditionally seen as a hedge against inflation.
However, higher interest rates reduce its appeal as a non-yielding asset.
Traders are closely watching upcoming US economic reports, including October's Consumer Price Index (CPI) data on Wednesday (November 13), the Producer Price Index (PPI) on Thursday (November 14), and retail sales data on Friday (November 15).
These figures, along with statements from Fed officials like Jerome Powell, could provide further clues about the future path of interest rates.
Outlook: A mixed path for gold
While gold faces pressure from a strong US dollar and rising bond yields, analysts remain cautiously optimistic about its long-term outlook.
According to Waterer, "There is still a fundamental path higher for gold, though it will likely require the dollar to lose some momentum."
He added that a soft inflation report could increase the likelihood of a December rate cut, offering some reprieve for gold prices.
Technical analysts are also watching key support levels.
Reuters’ Wang Tao suggests that spot gold may retest the $2,610 per ounce level, with a break below this potentially opening the way to $2,566-$2,588 per ounce.
Jateen Trivedi, VP Research Analyst at LKP Securities, believes the corrective trend in gold may persist as long as prices remain below the critical $2,750 per ounce resistance level.
In India, the gold market remains relatively resilient despite the global pressure on prices. "Gold is currently supported at ₹75,020-₹74,750 per 10 grams, with resistance at ₹75,580-₹75,810 per 10 grams," said Rahul Kalantri, VP Commodities at Mehta Equities.
