Gold prices in India declined during the trading week from December 16 to 20th, and a similar trend was witnessed in retail stores of major metro cities. One of the main reasons for the volatility in yellow metal prices was due to a decline in international prices as investors resorted to buying the dollar after the US Federal Reserve hinted at a hawkish tone in interest rates for 2025. In the week ahead, gold prices will continue to be driven by global trends, with a possible Santa Rally due to Christmas celebration.
Gold Prices In India:
24K gold prices in India have slipped from Rs 78,000 per 10 grams level to below Rs 77,500 level by the end of December 22, 2024. The week saw more selling than buying. 10 grams of 24K was muted on December 16 but rose by Rs 110 on December 17 before entering intense selling pressure between December 18-20.
10 grams of gold in 24K dropped by Rs 160 on December 18th, down by Rs 710 on December 19th and further lower by Rs 330 on December 20th. The prices were flat on December 21st and 22nd.
Notably, gold prices had touched its lowest performance in December month to Rs 70,400 in 22K and Rs 76,800 in 24K on December 20th.
Currently, the 24K gold price is at Rs 77,450 per 10 grams, at Rs 71,000 in 22K and at Rs 46,472 per 1- grams in 18K. Overall, in the current month, gold prices are down by nearly 1%.
Silver Prices In India:
Silver prices have been broadly flat in December 2024 so far. The lowest price level for silver was also on December 20 at Rs 90,500 per 1kg. Currently, silver price is at Rs 91,500 per 1kg.
MCX Gold, Silver Prices:
MCX gold price with February 2025 expiry is at Rs 76,432 per 10 grams by the end of the December 20th trading session. Meanwhile, MCX silver with a March 2025 expiry is at Rs 88,443 per 1Kg. The prices surged mildly yesterday.
Additionally, spot gold prices struggled to hold $2,600 an ounce level on Friday, as they recorded weekly decline.
According to SMC Global Securities report, gold prices faced selling pressure throughout the week, weighed down by the Federal Reserve's hawkish outlook. On Wednesday, the Fed signalled a cautious approach to further easing, with dot plot projections indicating only two rate cuts in 2025. Robust U.S. GDP data and an upward revision in consumer spending highlighted economic resilience, supporting the case for limited monetary easing. This dampened gold demand, as reduced easing lessens the appeal of non-yielding assets like bullion.
Gold Prices Outlook For December 23-29:
Broker SMC believes that gold's near-term outlook remains challenged by weakening physical demand in India, with officials forecasting a sharp decline in December imports. However, the metal has gained about 25% this year, driven by U.S. monetary easing, safe-haven demand, and central bank purchases. Following Wednesday's 25 basis point rate cut by the Fed, the dollar surged to its highest level since November 2022. The Fed's regional bank presidents, who will join the rate-setting panel in 2025, appear more hawkish, raising the likelihood of dissent against further cuts.
Moreover, the brokerage highlighted that jobless claims fell more than expected, reinforcing the view that the Fed will maintain a cautious approach to policy easing. In other developments, the Bank of England voted 6-3 to hold interest rates steady, while China is expected to keep its benchmark lending rates unchanged. Silver prices also faced selling pressure.
On the outlook for next week, SMC's note said, on COMEX, gold prices may trade between $2,550 and $2,640, with potential for a pullback due to oversold conditions. Silver is expected to range between $27.50 and $30.50. On the domestic market, gold may trade between Rs. 74,000 and Rs. 76,800, and silver between Rs. 82,000 and Rs. 89,500. A sell-on-rise strategy is advised.
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