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Gold prices fell today for the second day in Indian markets, after hitting a nine-month high earlier this week. On MCX, gold future were down 0.12% to 54,440 per 10 gram, off nearly 1,000 from its nine-month high of 55,250, hit earlier this week. Silver future rose 0.3% to 68,750 per kg.  In global markets, sport gold was flat as traders remained cautious ahead of US economic data due later in the day to gauge the Federal Reserve's rate hike stance. 

Spot gold was little changed at $1,792.80 per ounce. US personal consumption expenditure (PCE) data, which will cues on inflation, is due later today. Among other precious metals, spot silver rose 0.3% to $23.63.

Gold prices had fallen sharply on Thursday after data showed new claims for unemployment benefits in US rose less than expected last week, while the economy rebounded faster in the third quarter, rising 3.2% against the previously estimated 2.9%.

Although gold is considered a hedge against inflation and economic uncertainties, interest rates increase the opportunity cost of holding bullion since it pays no interest.

“Gold and silver prices fell sharply on Thursday, as the bullions felt the heat following a stronger-than-expected U.S. Q3 GDP number announcement. Weekly U.S. jobless claims did not rise as much as economists were expecting. Better than expected U.S. economic data increased fears of further Fed rate hikes in 2023 and supported the dollar index and pushed precious metals lower," said Rahul Kalantri, VP Commodities, Mehta Equities Ltd.

"We expect bullion prices to remain volatile in today’s session. Gold has support at $1784-1772 while resistance is at $1812-1822. Silver has support at $23.42-23.25, while resistance is at $23.88-24.05. In rupee terms, gold has support at 54,150-53,850, while resistance is at 54,620, 54,780. Silver has support at Rs67,850-67,380, while resistance is at 68,920–69,480," he added. 

Traders are also keeping a close eye on Covid situation in China,  the world's biggest consumer of gold.

"As China is the biggest consumer of gold – the lockdown situation in China, demand during the Chinese New Year in February and the Golden Week in October will drive prices. The trade tensions between the US and China are another big factor that may affect prices. Any escalation of geopolitical tensions between Ukraine-Russia, recession in the West, movement of the Dollar index, and gold buying program by global central banks will guide the larger price trajectory for gold and silver in 2023," said Colin Shah, MD, Kama Jewelry. (With Agency Inputs)

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