Gold lacklustre ahead of the US Fed policy outcome; experts highlight key levels to watch on MCX

Gold rates were flat in early deals on the MCX on Tuesday, December 9, as investors remained cautious ahead of the interest rate decision by the US Federal Reserve. MCX gold February contracts were flat at ₹1,29,978 per 10 grams around 9:25 am. MCX silver March futures were, however, up 0.50% at ₹1,82,705 per kg at that time.

The US Federal Reserve will announce its policy decision on Wednesday, December 10, at a time when the job market appears to be cooling, and inflation remains above the Fed's 2% target.

Personal Consumption Expenditures (PCE) price index, the Federal Reserve's favourite inflation gauge, increased 0.3% in September after rising 0.3% in August. Year-on-year, the PCE Price Index increased 2.8% after rising 2.7% in August.

However, last week's private payroll data showed the sharpest decline in more than two and a half years in November. US private payrolls declined by 32,000 in November.

US unemployment benefit claims dropped to 1,91,000 for the week ended November 29, the lowest in more than three years and significantly below economists' estimate of 2,20,000.

Comerica Economics expects the Federal Open Market Committee (FOMC) to cut the federal funds target by 25 basis points to a range of 3.50% and 3.75% at its last decision of the year this Wednesday.

"Several FOMC members will likely dissent again. The Fed is likely to remain tight-lipped about the outlook for rates in 2026, given the conflicting views among FOMC members. The FOMC probably will signal measures to support short-term funding markets after signs of tight liquidity in them in recent months," said Bill Adams, Chief Economist for Comerica Bank.

While rate cut expectations are positive for gold, elevated bond yields are weighing on prices. The benchmark US 10-year Treasury yields rose to a two-and-a-half-month high on Monday.

Aksha Kamboj, Vice President at the India Bullion and Jewellers Association (IBJA) and Executive Chairperson of Aspect Global Ventures, stated that gold remains supported by steady buying interest built over the past week.

"Intraday movement may remain measured, with traders focusing more on global risk cues and upcoming US data than sharp directional shifts today," said Kamboj.

Gold and silver: Key levels to watch

According to Rahul Kalantri, VP of commodities at Mehta Equities, gold has support at $4,165 and $4,135 while resistance is at $4,230 and $4,265. Silver has support at $57.60 and $56.95, while resistance is at $58.75 and $59.15.

In INR, Kalantri said gold has support at ₹1,29,250 and ₹1,28,450 while resistance is at ₹1,30,750 and ₹1,31,100. Silver has support at ₹1,80,250 and ₹1,70,200, while resistance is at ₹1,82,710 and ₹1,83,850.

According to Manoj Kumar Jain of Prithvifinmart Commodity Research, gold has support at $4,200 and $4,164, while resistance is at $4,250 and $4,288 per troy ounce, and silver has support at $57.70 and $57, while resistance is at $59 and $59.80 per troy ounce in today’s session.

On the MCX, Jain said gold has support at ₹1,29,100 and ₹1,28,600 and resistance is at ₹1,30,300 and ₹1,31,000, while silver has support at ₹1,80,000 and ₹1,78,400 and resistance is at ₹1,83,300 and ₹1,85,100.

"We suggest buying gold around ₹1,29,500 with a stop loss of ₹1,28,800 for the target of ₹1,31,000 and buying silver around ₹1,80,000 with a stop loss of ₹1,76,500 for the target of ₹1,87,000," said Jain.

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