Fundamental News and Triggers
Precious Metals witnesses year-end profit booking
- The precious metal dipped lower due to profit-taking and lacklustre long liquidation from short-term futures traders due to the year-end.
- Consumer prices in the United States increased 2.7% year on year in November, falling short of the 3.1% expected. Cooling US CPI inflation figures could pave the path for further Fed rate reduction.
- The Bank of Japan raises the benchmark rate to 0.75%, the highest in three decades. This is supportive for precious metals.
- In November, India’s gold imports decreased by about 73% month on month to $4 billion, from a record $14.7 billion in October due to lower demand and higher prices.
- Furthermore, geopolitical tensions between the United States and Venezuela, combined with robust industrial and investment demand, could provide some support to safe-haven assets such as gold.
Technical Triggers
- As suggested, Gold has touched the resistance of $4380 (~Rs 135,000), rising from support $4300 (~Rs 133,000) this week. Now prices are expected to consolidate in this same range. Either side breakout or breakdown will infuse a 2-3% rally.
- As suggested, Silver has touched the resistance of $67 (~Rs 208,000). Prices are expected to see some profit-booking before rising higher. The uptrend is intact until prices are trading above $62 (~Rs 194,000) support. Next target resistance is $70 (~Rs 218,000) and $72 (~Rs 224,000).
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