Gold prices gained in domestic futures markets on Tuesday, November 19, 2024, boosted by positive global trends and strong local demand. A pullback in the dollar, fueled by profit-taking, helped strengthen market sentiment and supported the yellow metal’s upward movement.
Gold Price Movement: Positive Global Sentiment
By 9:10 AM IST, MCX Gold for the December 5 expiry was trading 0.43% higher at ₹75,369 per 10 grams. The rise came amidst a weaker U.S. dollar, which dropped due to profit-booking after last week’s gains. As gold is priced in U.S. dollars, a weaker dollar makes bullion more affordable for buyers using other currencies, leading to increased demand for the precious metal.
Dollar Weakness and Global Market Trends
Gold’s price movement was also influenced by the ongoing trends in the global financial markets. The weakening dollar made the metal more attractive to international buyers. Investors kept an eye on U.S. interest rate developments, especially as several Federal Reserve officials were expected to speak this week. Their comments could shed light on future monetary policies and how they might affect gold prices.
U.S. Federal Reserve’s Influence on Gold
The future path of U.S. interest rates remains a critical factor for gold’s price. Investors are closely watching for signals that could indicate more rate cuts. The Federal Reserve has already reduced rates by a cumulative 75 basis points since September, and traders are anticipating a 58.8% chance of a 25-basis-point rate cut in December.
Despite strong economic data from the U.S. dampening the possibility of a large rate cut, market participants are still hopeful that the Fed will continue to support gold through further adjustments to the interest rate.
Geopolitical Tensions Support Gold Prices
The geopolitical landscape continues to add pressure on global markets, and gold remains a safe-haven asset for many investors in times of uncertainty. Recently, tensions between Russia and Ukraine escalated when Russia launched its largest airstrike on Ukraine in nearly three months, severely damaging the country’s power infrastructure. Furthermore, U.S. President Joe Biden’s approval of Ukraine’s use of American-supplied missiles has heightened geopolitical risks, reinforcing gold’s appeal as a hedge against uncertainty.
Expert Insights: Key Levels for MCX Gold
Experts suggest that investors keep an eye on critical price levels for MCX Gold. According to market analysts, if the yellow metal maintains its bullish momentum, it could surpass ₹76,000 per 10 grams in the near term, especially if the dollar continues to weaken. Conversely, support for gold is seen around ₹74,000 per 10 grams, with any significant dips likely attracting buyers.
