Tuesday, December 12, 2023

Gold Rate Today: Yellow metal gains on Fed’s dovish commentary. What should traders do?

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US Federal Reserve’s dovish commentary on the course of future rate decisions dented the prospects of greenback on Thursday, aiding yellow metal prices. MCX December gold futures were trading at Rs 60,866 per 10 gram, up by Rs 81 or 0.13% from Wednesday’s closing price. Meanwhile, the December Silver futures were trading at Rs 71,826 per kg, higher by Rs 528 or 0.74%.

While today’s action breaks gold’s three day losing streak, this precious metal is still trading at five month highs. On Comex, gold futures were trading at $1,992.80 per troy ounce on Thursday, up by $5.30 or 0.27% while Silver futures were at $23.095, higher by $0.305 or 1.34%.

The dollar index was trading at 106.35 against a basket of top six currencies, down by $0.54 or 0.50%.

Fed’s monetary policy decisions did not have a material impact on the gold price on Thursday, Deveya Gaglani, Research Analyst – Commodities at Axis Securities said.

However, Powell’s statement suggested that a decision for the course of action in December is yet to be determined, which dented the sentiments of the greenback somewhat and supported bullion at the lower level, he added. According to him, a strong support in Gold futures is placed around Rs 60,000 while a resistance is seen around Rs 61,500.

Neha Qureshi, Senior Technical & Derivative Analyst, Anand Rathi Commodities & Currencies said that gold was up on lower bond yields as the Fed chose to keep interest rates unchanged.

The decision to not tinker with the existing policy rate was on the bank of high bond yields which in Fed’s view are likely to keep lending rates elevated, she clarified.

On technical charts, the December gold contract has formed an inverted hammer candlestick pattern indicating some bearish movement, she said, though it still trades above its 100-day and 200-day Exponential Moving Average (EMA).

“The Relative Strength Index (RSI) is in an overbought zone which indicates some price correction. Additionally, the Moving Average Convergence Divergence (MACD) has produced a positive crossover,” she added.

She sees resistance at Rs 61,300-61,540 while support at Rs 60,500-60,000.

The MCX gold futures have declined by 60.25% or Rs 155 per 10 gram on the month-to-date basis while their gains in 2023 stand at 10.47% or Rs 5,768, according to Anuj Gupta, Head Commodity & Currency, HDFC Securities said.

As for Silver futures, the loss in November is around 0.52% or Rs 371 while the year-to-date gains stand at Rs 2.72% or 1,885 per kg.

Price of gold in major physical bullion markets like Delhi, Ahmedabad and other cities is Rs 61,500 per 10 gram while those of 1 kg of Silver is Rs 73,200.

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Intraday Trading Strategy by Neha Qureshi
– Sell MCX December Gold futures at Rs 60,950 with a stop loss of Rs 61,200 and a price target of Rs 61,500.

– Sell MCX December Silver futures at Rs 72,000 with a stop loss of Rs 73,000 and a price target of Rs 70,000.

Intraday Trading Strategy by Anuj Gupta
– Buy MCX December Gold futures at Rs 60,750,with a stop loss of Rs 60,580 and a price target of Rs 61,080

– Buy MCX December Silver futures at Rs 71,300 with a stop loss of Rs 70,600 and a price target of Rs 72,150.

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(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)

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