Mr. Sriram Iyer, Senior Research Analyst at Reliance Securities
RECAP
International gold and silver prices are on the way for a 2nd straight week of gains as the U.S. Dollar eased this week ahead of the Christmas holiday weekend.
The U.S. Dollar also eased this week as appetite for riskier assets improved on easing fears over a fallout from the Omicron coronavirus variant.
Meanwhile, hot inflation drove investors to safe-haven assets.
The latest Headline PCE price index was up 0.61% month-over-month (MoM) and is up 5.73% year-over-year (YoY). Core PCE (YoY) is now at 4.68%, well above the Fed's 2% target rate.
Meanwhile, U.S. GDP increased at a 2.3% annualized rate, the Commerce Department data showed for the July-September quarter and was up from the 2.1% pace estimated last month but was still the slowest since the 2nd quarter of 2020.
However, trading volume was thin and major players were away ahead of the yearend holidays, so the gold market was choppy.
Domestic gold prices were on the way for a weekly loss, bucking from international trend as the Rupee appreciated this week.
However, silver prices tracked overseas prices, tracking the overseas prices.
OUTLOOK
Looking ahead, price action will be choppy, range bound and could witness very low volumes due to the holiday season.
However, hot inflation and weakening dollar could cap downside.
On the domestic if the Rupee continues to appreciate against the greenback, upside will be limited.
But like the overseas markets, prices could remain choppy.
Technically, LBMA Gold Spot important pivot is at $1810.00 levels and a break above will push prices to the resistance zone at $1827.00-$1847.00 levels. However, a break below could pull prices back to the support zone at $1,797.00-$1,775.00 levels.
On the domestic front, MCX Gold February important pivot is at 48000 and a break below will pull prices to the support zone at 47,875-47,730 levels. However, a sustained trade above will push prices to the resistance zone at 48,540-48,735 levels.
For silver, LBMA spot important pivot is at $22.680 levels and a break above will push prices to the resistance zone at $23.180- $23.465 levels. However, a break below could pull prices to support zone at $22.390-$21.895 levels.
On the domestic front, MCX Silver March important pivot is at 61,980 and a break below will pull prices to the support zone at 61,470- 61,070 levels. However, a sustained trade above will push prices to the resistance zone at 62,775- 63,030 levels. |
