Gold & Silver

Gold, silver trade weak tracking global trend

Rutam Vora Ahmedabad | Updated on November 23, 2021

Stronger dollar and slowing demand indicate further downside

Gold futures opened flat on Tuesday at ₹47,985 per 10 grams for December contract, marginally up from previous close of ₹ 47,923 on MCX. MCX Gold tracked the global nervousness in yellow metal following a stronger dollar on reappointment of Jerome Powell as US Federal Reserve Chair.

Will gold and silver continue their bullish trend?

MCX silver December Futures opened firm at ₹64,695 per kg, higher by ₹124 from the previous close of ₹64,571.

Fast Four on bullion

1. Weakness in spot gold: Gold continued a slide in the spot markets. Spot gold (999 purity) as quoted by India Bullion and Jewellers Association (IBJA) for November 22, was ₹48,834 per 10 grams, nearly 1 per cent down from previous close of ₹ 49,235 on November 18. Prices came under pressure as buyers held back purchases amidst uncertainty on prices and a continued slide in the international market. The spot prices, however, are still at the higher side than the month-ago period.

2. MCX Futures slip into red: Gold and silver Futures made positive opening on Tuesday but slipped under red amidst international price pressure. Even as the safe haven demand persisted, the precious metals couldn’t hold the positive territory in the opening trades and slipped into the red after making initial gains. MCX gold for December quoted at ₹47,893 off from the opening high of ₹47,985.

After weak opening, Gold firms up on buying at lower levels

Silver too tracked global weakness. MCX Silver December Futures slipped into red after losing ₹143 from opening levels of ₹64,695 to trade at ₹64,552.

3. Stronger Dollar prompt a weaker gold: On Monday, international gold prices fell to near $1807 per oz (an ounce is equal to approx 28.3 grams) on November 22, which was sharply lower from $1,849.5 quoted on November 21. Weakness in gold was triggered by a stronger dollar, which hit a 16-month high levels against the euro following reappointment of Jerome Powell as Federal Reserve Chair and on indication of a faster tapering of stimulus to curb the inflationary risks. Analysts believe reappointment of Powell would mean a lesser dovish outlook for monetary policy in the US.

CME silver December futures last quoted at $24.3 per ounce, on a steady decline since November 16 from $25.49 levels. The weakness in the precious metals is driven by the receding interest from the investors from the asset class, which would not offer a competitive advantage over other financial asset classes when Fed decides to hike the rates.

4. Outlook: Multiple analysts point at a weaker outlook for gold. MCX gold futures is likely to oscillate in the range of ₹47,234-49,220 during Tuesday while the range for silver futures on MCX is likely to be ₹63,390-66,646. Open interest in the futures contracts has witnessed a sharp dip, indicating that on the technical parameters, the bullion market is under long liquidation and may witness further downside.

Published on November 23, 2021

Follow us on Telegram, Facebook, Twitter, Instagram, YouTube and Linkedin. You can also download our Android App or IOS App.

  1. Comments will be moderated by The Hindu Business Line editorial team.
  2. Comments that are abusive, personal, incendiary or irrelevant cannot be published.
  3. Please write complete sentences. Do not type comments in all capital letters, or in all lower case letters, or using abbreviated text. (example: u cannot substitute for you, d is not 'the', n is not 'and').
  4. We may remove hyperlinks within comments.
  5. Please use a genuine email ID and provide your name, to avoid rejection.

You May Also Like