Gold cautious ahead of Fed minutes. Where is the yellow metal headed?

At MCX, gold futures maturing December 5, is trading at ₹52,208 at the time of writing, down by ₹81 or 0.15%. While silver futures also maturing on December 5, are trading at ₹60,983 lower by ₹3.

Meanwhile, a 24-carat gold in 10 grams is cheaper by ₹110 on Wednesday to ₹52,640, while in 100 grams the same carat is at ₹5,26,400 down by ₹1,100. Further, 22 carat in 10 grams is available at ₹48,250 lower by ₹100, and the 100 grams in the same is priced at ₹4,82,500 below ₹1,000 compared to the previous day, as per GoodReturns data.

In its intraday outlook, ICICI Direct’s note said, MCX gold prices traded flat on Tuesday after retreating as much as 1% in the last session despite a drop in US dollar index, with the focus turning to minutes from the US Federal Reserve’s latest meeting for clues on future rate hikes. Further, bullion prices were supported by a drop in US 10 years treasury yields.

For November 23, ICICI Direct expects gold prices to trade with a positive bias for the day amid weakness in the US dollar and a decline in US treasury yields. Meanwhile, traders will remain cautious ahead of FOMC meeting minutes and major economic data to get clues on further interest rate hikes. MCX Gold is likely to surpass the hurdle of ₹ 52,450 to start its upward trend towards the level of ₹ 52,600.

While the stock brokerage expects MCX silver prices are expected to take cues from gold prices and rise toward ₹ 61,850 level for the day.

On the global front, US gold futures slipped marginally to around $1,736 per ounce compared to the previous closing of $1,739.90. The gold futures did open at $1,741 per ounce before correcting. While COMEX gold trades flat near $1740 per ounce after a muted ending on Tuesday.

Ravindra V.Rao, CMT, EPAT VP-Head Commodity Research Kotak Securities said, “Gold has been trading steady since it fell by 0.86% at the start of the week.US Dollar Index (DXY)is trading slightly lower after a 0.57% drop in the previous session. DXY recovered to trade as high as 107.47 but didn’t sustain as 107.50 is good support turned resistance. Gold and US Dollar are driven by hopes of a smaller rate hike by the Fed in its upcoming meetings. Focus will now shift to flash PMI numbers from US along with the FOMC meeting minutes. Weaker PMI print and a dovish language in FOMC minutes might be supportive for gold. On the price front if the price sustains below $1740-$1735 zone on a closing basis the correction might deepen towards $1706 or else recovery can be seen till $1762/oz.”

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint.