Gold MCX Dec. Weekly Close (Rs. 61364 / 10 gm)                          Spot Close $ 2000.82/ troy ounce 

Silver MCX Dec. Weekly Close: (Rs. 73884 / Kg)                              Spot Close $ 24.33/troy ounce 

Gold steadied this week after notching a second weekly gain that pushed it above $2,000 an ounce, ahead of US government bond auctions amid loads of macro data due to provide further direction to prices. The US treasury auction cycle, which will begin with Monday’s sales of two-year and five-year notes, will help gauge whether investors are confident this year’s selloff in Treasuries has run its course. Most Wall Street strategists predict that the recent trend of lower yields will persist in 2024 amid broad-based gains in the bond market.  

 Gold Outlook – Week Ahead 

 The dollar index is down around 3.5% from its highs seen in October with 10Y yields also falling from its highs above 5 % seen last week. The drop looks have come largely onto the view that the Federal Reserve’s tightening cycle is over and now the market expects an interest rate cut as early as March 2024. Although November and December remain a seasonally soft month for the dollar, the fall seen is largely over stretched giving some room for the index to bounce back this week. 

 The current week revolves around three themes, the Fed, OPEC+ and US data. Fed communication this week will come from the release of the Fed’s Beige book and also some key speakers, including Fed Chair Jerome Powell, on Friday. The Beige Book may not paint a soft enough picture of the economy leading to less speculation of an early rate cut.  

In terms of the OPEC+ meeting, expectations remain that Saudis will extend their voluntary supply cut supporting the oil prices which could be a mild dollar positive. In terms of US data, the highlight remains stable (0.2% MoM) core PCE inflation data for October and the ISM manufacturing data on Friday.  Thursday’s US Core PCE inflation data is probably the largest bearish risk to the dollar this week. 

 Overall with Thanksgiving out of the way in the US, this week’s calendar may provide fuel for the next leg higher in the precious metals, especially if the upcoming data weakens the dollar and pressures Treasury yields. We may continue to see fresh upside if gold sustains above $ 2009 in spot this week as a bullish bias to remain within the trading range to remain around $ 2003 – 2030 per ounce levels in the Spot while MCX Gold in the December futures contract may continue its upside momentum above Rs. 62000 per 10 gm levels for the week.