US gold futures edged 0.2% higher to $2,624.70 per ounce.
In India, 24-carat gold was priced at ₹7,871.3 per gram, down ₹1,090, while 22-carat gold was valued at ₹7,216.3 per gram, showing a drop of ₹1,000.
Key factors driving gold prices
Gold prices faced headwinds due to multiple factors.
Matt Simpson, Senior Analyst at City Index, noted that despite the sell-off, gold has held up well, indicating safe-haven demand amid ongoing uncertainties.
He emphasised that the market is bracing for more turbulence, particularly with President-elect Donald Trump’s proposed tariffs, which have reignited fears of trade wars.
Trump’s vow to impose hefty tariffs on imports from Canada, Mexico, and China has created economic jitters.
Gold is traditionally viewed as a safe investment during times of geopolitical uncertainty, including trade tensions and conflicts.
Meanwhile, Federal Reserve Bank of Minneapolis President Neel Kashkari hinted at a possible rate cut next month, which has further supported the gold market.
The CME Group’s FedWatch Tool indicates a 55.9% chance of a 25-basis-point rate cut in December, adding to market speculation.
Short-term outlook
Despite recent volatility, analysts expect gold to trade in a narrow range in the short term, with slight upward momentum.
“Gold may trade between $2,600 per ounce (₹75,000 per 10 grams) and $2,700 per ounce (₹77,000 per 10 grams) for the next few days,” said Renisha Chainani, Head of Research at Augmont Gold For All.
The upcoming US economic data, including consumer confidence reports and the minutes from the Federal Reserve’s November meeting, will be closely watched for clues on future monetary policy.
Pranav Mer, Vice President at JM Financial Services, pointed out that the market remains under pressure, with gold facing resistance at ₹75,500 per 10 grams and ₹76,200 per 10 grams levels. On the downside, further corrections could drive prices to ₹74,750 or ₹74,000 per 10 grams.
Investment strategy
Gold’s volatility presents both challenges and opportunities for investors.
The current market environment, shaped by geopolitical risks and economic data, makes gold a key asset for portfolio diversification.
Kunal Shah, Head of Commodities & Currency Research at Nirmal Bang, remains bullish on gold.
He shared his view: “My view is still bullish on gold, but I expect a correction or profit-taking. I see a bottom placed at $2580 per ounce, even though the dollar remains strong.”
Shah believes that gold may dip to $2,620–$2,630 per ounce on COMEX, offering a buying opportunity for investors looking to accumulate more.
In India, Shah predicts that the December contract may see a dip to ₹76,000 per 10 grams.
–With agencies inputs
