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Gold prices in India surged today after Federal Reserve Chair Jerome Powell said that the US central bank might slow the pace of its interest rate hikes as soon as this month. On MCX, gold surged nearly 1,000 to 53935 per 10 gram, its biggest single-day gain in nearly five months. Silver futures jumped 3% to 65,302 per kg. However, Powell also cautioned that the fight against inflation was far from over.

Today's gain in domestic gold comes on the back of a strong gain in the precious metal in November on expectations of a slowdown of rate hikes. In India, gold prices had jumped nearly 5% in November. 

In global markets, spot gold today rose around 1% to $1,785.60 per ounce, supported by a pullback in dollar index and US bond yields. Lower rates tend to boost the appeal of non-yielding gold. Rival safe-haven dollar fell nearly 1%, making gold less expensive for overseas buyers. 

Gold prices took positive cues from Powell's speech as higher hikes are kept away and we shall see lower hikes going ahead as the data has shown inflation is coming down which helps the slower hike dovish stance from Powell. US non -farm payroll data on Friday shall give further trigger to the prices as Fed chief's positive comment has been priced in by Gold. 53,000 & 1750$ shall act as new support for the prices," said Jateen Trivedi, VP Research Analyst at LKP Securities. 

On the higher side, $1795-1800 and 53,900-54,000 will act as resistance for gold, he added. 

Traders will also look ahead to Covid protocols in China, the world's top consumer of gold. 

“Although the smaller rate hike expectation has propped up gold prices the gains may be capped as there is still no indication of end point to the rate hikes. Having said that the focus will now shift to the payroll  print later this week as well the November inflation report that is due just before the December FOMC meeting. Investment demand has been muted. The near-term outlook remains positive but traders will watch for the data prints to take further cue," Kotak Securities said in a note. 

 

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