Gold price dips 2.60% this month. Should you buy on escalating Russia-Ukraine war, wedding season in India? | Stock Market News
Source: Live Mint
Gold rate today: After rising for three straight months, gold prices in India registered around 2.60 per cent dip in November 2024. This pullback in the precious yellow metal was driven by the announcement of a ceasefire agreement between Israel and Hezbollah and the rising US dollar rates. However, commodity market experts believe that renewed tension in the Russia-Ukraine war, Israel-Hezbollah accusing each other of the ceasefire violation and wedding season in India are expected to fule gold prices. They said that MCX gold rates may touch ₹78,800 per 10 gm mark as the outlook for the precious metal is positive in the near term.
Escalation in the Russia-Ukraine War
Highlighting the reasons that triggered selling pressure in gold prices this month, Sugandha Sachdeva, Founder of SS WealthStreet, said, “After a three-month rally, gold prices posted a decline of 2.60 per cent for the month at the domestic markets, erasing some of the geopolitical risk premium. This pullback was largely driven by the announcement of a ceasefire agreement between Israel and Hezbollah and the broader strength in the US Dollar Index following Donald Trump’s victory in the US Presidential elections.”
US Fed rate cut in focus
Regarding expectations from the US Fed meeting in December, Sugandha Sachdeva said, “Economic data for the week showed the US economy growing by 2.8% in Q3, which is in line with expectations. Meanwhile, inflation, as measured by the PCE Index, rose 2.3% YoY, slightly above the previous month’s 2.1%. While these figures have not entirely ruled out the possibility of a 25 bps rate cut at the US Fed’s December meeting, the resilience of the US economy has cast doubt on further rate cuts in 2025, which is weighing on gold prices.”
Gold price outlook
Expecting a rebound in gold prices, the SS WealthStreet expert said, “The escalating tensions between Russia and Ukraine reignited safe-haven demand for gold towards the end of the week, thereby trimming weekly losses. Russia warned of a broader escalation in response to Ukraine’s use of Western-made long-range missiles, adding a layer of geopolitical uncertainty. Additionally, the dollar index’s drift to a two-week low further supported gold prices.”
Expecting support from physical demand in the domestic market, Anuj Gupta, Head—Commodity & Currency at HDFC Securities, said, “While the geopolitical tension is expected to work as a positive global trigger for the gold prices in the near term, wedding season in India is expected to fuel demand for physical gold in the domestic market. So, global and domestic triggers favour a rebound in the yellow metal rates after a sharp fall in November 2024.”
Gold rate today: Important levels to watch
“Near-term outlook for gold price suggests resistance at ₹78,800 per 10 gm mark, while support is seen at ₹73,500 per 10 gm and further at ₹71,700 per 10 gm levels. The market focus will shift to the US Fed Chair’s speech, and the November jobs report will be scheduled next week. These key events are expected to influence expectations regarding the US Fed’s rate cut decision at its final policy meeting of the year and will likely shape the trajectory of gold prices in the coming month,” concluded Sugandha Sachdeva.
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before taking any investment decisions.
