Gold Price Today: Yellow Metal Hits Three-Week High—Will End To US Govt Shutdown Support Bullion?
Gold Price Outlook: Ross Maxwell, Global Strategy Lead at VT Markets believes that in the short term, the outlook for Indian gold prices remains bullish despite the reopening of US the government.
Gold Price Today: The yellow metal hit its highest levels in nearly three weeks on Tuesday, Nov. 11, supported by expectations a potential US government reopening could restart the flow of US economic data ahead of an expected US Federal Reserve rate cut next month.
Spot gold was last up 0.6% at $4,140.60 per ounce, having earlier hit its highest since Oct. 23 at $4,148.75, still below its peak of $4,381.21 on Oct. 20. US gold futures for Dec. delivery rose 0.6% to $4,147.20 per ounce.
Back home, gold futures last traded 0.03% lower at Rs 1,23,932 per 10 gram on the multi commodity exchange. Spot silver last gained 1.3% to $51.20 per ounce, platinum rose 0.9% to $1,592.28 and palladium climbed 1.8% to $1,440.95.
Gold Price: What's driving the rally in the precious metal?
The latest rally in gold, traditionally a hedge against uncertainty, has come alongside improving risk appetite driven by hopes of a US government shutdown deal, as traders bet that resumed economic data could strengthen the US Federal Reserve's case for further rate cuts. Gold, a non-yielding asset, tends to do well in low-interest rate environments.
US Fed policymakers remain divided on the path of monetary policy, complicating Fed Chair Jerome Powell's efforts to navigate the differing views following two rate cuts earlier this year. Data last week highlighted the economic stress, with the US shedding jobs in October and consumer sentiment declining to a 3-1/2-year low as of early November.
According to Ross Maxwell, Global Strategy Lead at VT Markets, the global sentiment on the potential end to the US government shutdown is mixed. Normally, an end to the uncertainty would strengthen the US dollar and reduce safe-haven demand for gold. However, gold prices have reacted bullishly, indicating that markets may expect continued fiscal spending, rising US debt levels, and a weaker US dollar in the medium term.
Julius Baer analyst Carsten Menke reiterated a constructive outlook for both gold and silver, adding that "the fear of missing out still seems present" amid a favorable fundamental backdrop for the metals.
Gold Price in India: How should you place bets?
For India, domestic gold prices typically follow international trends but are further influenced by the INR exchange rate and local demand. A stable or slightly weaker rupee will further add weight to any rise in international gold prices. With India entering a high-demand period with the wedding and festive season, domestic sentiment is likely to remain solid.
"In the short term, the outlook for Indian gold prices remains bullish. If global gold remains strong and the rupee stays under some pressure, prices could continue to see gradual gains, reflecting both international support and domestic demand strength," said Maxwell.
If the global rally continues and the rupee remains stable or weakens slightly, prices could move initially toward 126,000. However, if US yields rise and the US dollar strengthens, prices could correct to around 110,000 with strong support around the 100,000 area if we see a deeper correction.
"Domestically, the immediate impact will mean steady demand from the wedding season and renewed interest from investors seeking a hedge against uncertainty. However, if high prices remain then this can reduce demand for jewellery if the rally extends too far," added Maxwell.
As per experts, the overall effect will likely be moderate upward pressure on gold, supported by India's festive demand and the global market sentiment, with a cautiously positive outlook for the short term.
Jateen Trivedi, VP Research Analyst - Commodity and Currency, LKP Securities said, "Gold rallied on dollar index weakness and optimism over the possible reopening of the US government. The reopening is expected to revive the flow of key economic data, which could strengthen Fed's case for maintaining lower rates in the Dec. meeting—fueling positive sentiment in bullion."
"With CPI data due in both the US and India this week, the volatility is expected to remain elevated. The yellow metal is likely to trade within a broad range of Rs 1,22,500–Rs 1,26,000," added Trivedi. Gold is widely considered as a hedge against inflation and hence, a safe-haven asset for investors.
