Gold prices surged past Rs 78,978 to a two-week high on Wednesday, driven by rising geopolitical tensions and expectations of a U.S. Federal Reserve rate cut next week, as investors awaited the closely watched U.S. inflation report later in the day.
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February gold futures were trading at Rs 78,840 per 10 grams on the MCX, up by Rs 502 or 0.64% from the previous session’s closing price. Meanwhile, March silver futures were at Rs 95,521 per kg, falling by Rs 4.
Meanwhile, Spot gold was up 0.2% at $2,704 per ounce, as of 0253 GMT, and hit its highest since November 25.
Investors’ focus is on the U.S. Consumer Price Index (CPI), which is expected to have risen by 0.3% in November. The data could help set expectations for the Fed’s 2025 policy.
The Fed is likely to cut rates by 25 basis points on December 18, according to 90% of economists polled by Reuters, with most expecting a pause in late January amid concerns over inflationary risks.
On the geopolitical front, the Israeli military said it struck most of the strategic weapons stockpiles in Syria and hit two Syrian navy facilities, while the South Korean police raided the presidential office over martial law, Yonhap news agency reported.
Gold is considered a safe investment during economic and geopolitical turmoils and tends to thrive in a low-interest-rate environment.
“MCX Gold has support at Rs77,840, while resistance at Rs 79,000. Sliver has support at Rs 94,050, while resistance at Rs 96,940,”.
