On the global market, the precious metal remained firmly above the $4,200 level, supported by weak US private payrolls data that reinforced expectations of a rate cut at the December 9-10 Federal Reserve meeting. Spot gold settled at $4,207.56 an ounce in early Asian hours, while US gold futures edged 0.1% higher to $4,237.50.CME’s FedWatch tool now assigns an 89% probability of a rate cut next week. The dollar, meanwhile, fell to a five-week low as softer-than-expected data reinforced beliefs that the Fed will ease policy.
Volatile session, soft US data keeps the precious metal high
Rahul Kalantri, VP Commodities at Mehta Equities, said: “Gold and silver traded with sharp intraday volatility, recovering from the day’s lows but failing to sustain gains and ultimately closing flat. Precious metals headed towards new highs on Wednesday as market participants reacted to key US economic data and rising geopolitical tensions.”
Kalantri pointed out the sharp miss in the ADP employment report, noting: “The ADP Non-Farm Employment Change report released yesterday came in well below expectations, with a significant miss that has fueled speculation about the Fed’s next steps. The weak data pushed the dollar index below 99, giving additional momentum to precious metals.”
On the near-term outlook, Kalantri said: “As economic uncertainty deepens amid rising geopolitical risks, investors continue to lean on the strength of gold as a safe haven. Current US PCE data will provide further direction for precious metals. Gold has support at $4175-4145, while resistance is at $4270-4295. Silver has support at $57.70-56.85 while resistance is at $4270-56.85 is $58.95-59.45 In INR, gold has support at Rs1,29,450-1,28,750, while resistance is Rs1,30,950-1,31,700, resistance is Rs1,83,510, 1,84,670. amounts to.
The dollar weakens, Fed expectations strengthen
Jigar Trivedi, Senior Research Analyst at Reliance Securities, said gold “stuck above $4,210/oz and near six-week highs as investors grew more confident of a Federal Reserve rate cut next week.”
Highlighting the sharp deterioration in U.S. employment trends, Trivedi said, “November ADP data showed a surprise decline of 32,000 private sector jobs, well below expectations for a gain of 10,000 and the third decline in four months. This represents the sharpest decline in jobs since 2023, reinforcing concerns about a cooling U.S. labor market.”
Noting that the report echoes the dovish signals from Fed officials, Trivedi said: “The report echoed the dovish signals from Fed officials, who emphasized the need to address slower job growth. In response, interest rate futures have priced in a nearly 90% chance of a 25 basis point cut next week. Investors now turn to September’s delayed PCE data on Friday for further clues on monetary policy.”
He added that geopolitical tensions also provided some support: “Adding some support was a geopolitical risk premium as the US and Russia concluded talks on the war in Ukraine without any breakthrough.”
At the domestic level, Trivedi said, “MCX Gold February may post some gains and Rs. 129,500/10g is a support, but the undertone is bullish. We may see Rs. 131,000/10g on the higher side.”
Also Read: With the way things are going, will the Rupee cross the 100 mark sooner or later?
With domestic prices now at the upper end of the resistance band indicated by analysts, between Rs 1,30,950 and Rs 1,31,700, traders will pay attention to the US PCE inflation data and next week’s Fed decision for the next directional trigger. A dovish rate could push gold prices decisively above Rs 1.31 lakh, while stronger-than-expected inflation could interrupt the rally at current levels.
(Disclaimer: Recommendations, suggestions, views and opinions expressed by the experts are their own. These do not represent the views of the Economic Times)
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