Gold price today: Rates drop on MCX on profit booking as BoJ raises key policy rate by 25 bps

Gold price today: The rates of gold were down in the domestic futures market on Friday (December 19) at noon on profit booking after the policy decision of the Bank of Japan (BoJ), while softer inflation data in the US also influenced prices, as the yellow metal is considered a hedge against inflation. MCX gold February futures were 0.21% down at ₹1,34,236 per 10 grams around 1 pm. MCX silver March futures were 0.94% higher at ₹2,05,488 per kg at that time.

The Bank of Japan (BOJ) has raised its key policy rate to 0.75%, its highest level since September 1995. While the move is on expected lines, the move is expected to influence yen-carry traders.

International gold prices also declined on lower-than-expected U.S. ‍inflation data, while an uptick in the dollar index also dragged bullion lower. The dollar index rose by 0.10%, trading near ⁠one-week highs and weighing on bullion's appeal.

Meanwhile, US consumer prices ⁠rose less than expected in the year to November. As Reuters reported, US consumer prices at 2.7% year-on-year fell short of the 3.1% ​increase forecast by economists polled by the news agency.

Aksha Kamboj, Vice President at India Bullion and Jewellers Association (IBJA) and Executive Chairperson of Aspect Global Ventures, pointed out that gold is currently holding firm around the recent high levels due to the safe-haven demand and volatile global markets.

"The buyer momentum is still strong despite the high levels, and this is an index of the confidence level of market participants about gold’s defensive characteristics. There can, however, be some consolidation around the recent gains," said Kamboj.

Jigar Trivedi, Senior Research Analyst at Reliance Securities, noted that gold traded near its October record high and was on track for a second consecutive weekly gain, as softer-than-expected US inflation bolstered expectations of further interest-rate cuts.

"Geopolitical tensions have also supported the metal, with the US halting sanctioned Venezuelan oil shipments following a tanker seizure and President Putin reaffirming territorial claims in Ukraine," said Trivedi.

Trivedi believes MCX gold February futures are likely to remain within a range of ₹1,34,000 to ₹1,35,000 per 10 grams.

Rahul Kalantri, VP of commodities at Mehta Equities, said gold has support at $4,275 and $4,245 while resistance is at $4,355 and $4,385. Silver has support at $64.40 and $63.75, while resistance is at $65.60 and $66.15.

In INR terms, Kalantri said gold has support at ₹1,33,850 and ₹1,33,110 while resistance is at ₹1,35,350 and ₹1,35,970. Silver has support at ₹2,02,450 and ₹2,00,28,0, and resistance is at ₹2,05,810 and ₹2,07,270.

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