Gold prices experienced a decline of -0.29%, settling at 63203, as profit-booking ensued, driven by signs of recovery in US Treasury yields. Despite this retracement, the broader sentiment towards remains positive, with expectations of the Federal Reserve (Fed) initiating interest rate cuts from March. The outlook is supported by a clear downward trajectory in underlying inflation, prompting investors to maintain an optimistic view of the precious metal. The consistent sell-off in the US Dollar, attributed to early rate cut expectations, contributes to supporting the Dollar-denominated value of gold.
Federal Reserve Chairman Jerome Powell’s commentary on potential rate cuts has led to expectations among investors, although some Fed policymakers consider rate cut discussions premature at present, lacking confidence in inflation reaching the 2% target. The US Department of Labor reported an increase in Initial Jobless Claims (IJC) for the week ending December 22, with individuals claiming jobless benefits rising to 218K, exceeding the consensus of 210K and the previous reading of 206K. In China, net gold imports via Hong Kong rose approximately 37% in November compared to the previous month, reaching 36.801 metric tons. Total gold imports via Hong Kong recorded a 37% increase at 46.049 tons.
Technically, the gold market is undergoing long liquidation, with a drop in open interest by -5.3% to settle at 15184. Support is identified at 63045, and a breach below could lead to a test of 62880. On the upside, resistance is observed at 63380, and a move above may test 63550.
