As Dhanteras, the auspicious day for purchasing gold, approaches, Indians are gearing up to welcome Goddess Lakshmi into their homes. However, prospective buyers may find themselves navigating fluctuating gold prices amidst ongoing global uncertainty. Gold, often considered a symbol of wealth and prosperity, remains an attractive investment for many during this festive season.
Market Dynamics and Recent Developments
Gold prices have experienced minor gains on Wednesday, following a dip to a two-week low on the previous day. The decline in gold prices can be attributed to a reduction in the risk premium linked to the ongoing Israel-Hamas conflict, which has been closely watched by global markets.
The primary focus for investors, both in India and abroad, now shifts to the United States Federal Reserve and their stance on interest rates. The Federal Reserve recently decided to leave interest rates unchanged in its latest policy meeting. However, it’s the remarks from Federal Reserve Bank of Minneapolis President Neel Kashkari that have caught the market’s attention. Kashkari’s statements, suggesting that the Fed may need to take further measures to control inflation, have left traders somewhat jittery.
Current Gold and Silver Prices
– MCX December gold futures are trading at Rs 60,431 per 10 grams, reflecting an increase of Rs 84 or 0.14% from the closing price on Tuesday.
– December silver futures stand at Rs 70,654 per kilogram, down by Rs 20 or 0.03%.
On the international stage:
– Gold futures on the Comex are trading at $1,975.30 per troy ounce on Wednesday, marking a gain of $1.80 or 0.09%.
– Silver futures on Comex stand at $22.640, up by $0.051 or 0.230%.
The dollar index, measuring the currency against a basket of top six currencies, is trading flat at 105.56, with a marginal increase of 0.02 points or 0.02%.
On Tuesday, December gold futures on the MCX concluded at Rs 60,375, experiencing a decline of Rs 395 or 0.65%. Simultaneously, December silver futures settled at Rs 70,655, marking a reduction of Rs 1,462 or 2.03%.
Expert Insights
Anuj Gupta, Head of Commodity & Currency at HDFC Securities, noted that the correction in gold and silver prices can be attributed to traders booking profits at higher levels before Diwali. Silver, in particular, experienced a 2.22% correction and closed at Rs 70,634.
Looking ahead, Gupta envisions gold trading in the range of $1,960 to $1,975 on the Comex and between Rs 60,000 and Rs 60,500 on the MCX.
Gold futures on the MCX have experienced a decline of 0.97% or Rs 593 per 10 grams on a month-to-date basis, but they have seen a notable increase of 9.69% or Rs 5,330 on a year-to-date basis as of Tuesday, November 7, based on closing prices. Silver futures, on the other hand, have lost nearly Rs 1,035 or 1.44% in value in November while gaining 1.76% or Rs 1,221 on a year-to-date basis.
Neha Qureshi, Senior Technical & Derivative Analyst at Anand Rathi Commodities & Currencies, highlighted the bearish sentiment in the market, with the December gold contract showing a pattern of lower high lower low. The contract is currently trading above its 100-day and 200-day Exponential Moving Average (EMA), but the Relative Strength Index (RSI) is also forming a pattern of lower high lower low.
As Indians prepare to celebrate Dhanteras and bring wealth and prosperity into their lives, it’s essential to be mindful of the ever-changing dynamics of the gold market. Fluctuations in gold prices are influenced by global events, economic policies, and investor sentiments. The intricate dance between these factors will continue to shape the path of gold prices, making it crucial for buyers to stay informed and make well-informed decisions as they welcome the festival of lights.
