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HomeEnglishGold and Silver Slide Amid Hotter-Than-Expected U.S. PPI Data and Stronger Dollar

Gold and Silver Slide Amid Hotter-Than-Expected U.S. PPI Data and Stronger Dollar

Gold and silver prices faced a sharp decline following the release of hotter-than-expected U.S. Producer Price Index (PPI) data and a surge in the dollar index. The U.S. PPI for November came in at 0.4%, doubling market expectations of 0.2%, while the annual PPI rose to 3.0%, significantly higher than the Federal Reserve’s 2.0% target. Although core PPI aligned with forecasts at 0.2%, the higher overall readings fueled concerns over potential delays in Federal Reserve rate cuts, triggering a sell-off in precious metals.

Adding to the market dynamics, initial jobless claims rose to 242,000 last week, potentially lending some support to gold and silver prices in the near term.

Key Factors Behind the Decline in Precious Metals:
Profit Booking: Investors sought to secure gains amid market uncertainty.
Hotter U.S. PPI Data: Higher-than-anticipated inflation readings spurred fears of prolonged high-interest rates.
Trump’s Comments on Crypto: Former President Donald Trump teased upcoming plans involving cryptocurrency, which may have drawn investor interest away from traditional safe-haven assets.

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Chinese Economic Policy Signals
In a separate development, China’s top policymakers pledged to increase next year’s fiscal deficit target and implement interest rate cuts. During the Central Economic Work Conference in Beijing, they emphasized maintaining the yuan’s stability and committed to raising debt issuance. This dovish stance may influence global market dynamics, including demand for precious metals.

Market Performance
On Thursday, both international and domestic markets closed on a weaker note for gold and silver:
International Markets:
Gold February futures fell by 1.72%, settling at $2,709.40 per troy ounce.
Silver March futures dropped by 4.09%, closing at $31.619 per troy ounce.
Domestic Markets:
Gold February futures settled at ₹77,969 per 10 grams, down by 1.31%.
Silver March futures declined by 3.31%, closing at ₹92,633 per kilogram.

Expert Insights
Manoj Kumar Jain, Director at Prithvi Finmart, predicts continued volatility in gold and silver prices driven by fluctuations in the dollar index, geopolitical tensions, and global market trends. However, he expects the metals to hold key weekly support levels of $2,588 for gold and $29.88 for silver.
Technical Levels:
Gold:
Support: $2,688–$2,664
Resistance: $2,732–$2,750
MCX Range: ₹77,700–₹77,330 (Support), ₹78,200–₹78,500 (Resistance)
Silver:
Support: $31.20–$30.88
Resistance: $31.94–$32.40
MCX Range: ₹91,800–₹91,100 (Support), ₹93,300–₹94,200 (Resistance)

Recommendation: Jain advises day traders to avoid positions in precious metals for now but suggests long-term investors consider accumulating at lower levels.

Range-Bound Trading Expected
SMC Global forecasts range-bound trading for gold and silver, with gold likely to trade between ₹77,500 and ₹78,000 and silver in the ₹92,000 to ₹92,800 range. The bias remains sideways to bearish as traders await the Federal Reserve’s upcoming decision on interest rates.

IIDM also highlights key resistance for gold at $2,700, with potential upside to $2,720–$2,725, while crucial support lies at $2,675. For silver, resistance is expected at $31.94–$32.40, with support at $31.20–$30.88.

Friday, December 13, 2024
United States
03:00 AM: Fed Balance Sheet
07:00 PM: Export Prices MoM (NOV)

Geopolitical Tensions
Russia-Ukraine Conflict
Syria Crisis
Israel-Hamas Conflict

Gold Price Today
99.50~79700
23 KT~77700
22 KT~74500
20 KT~67900
18 KT~61300
14 KT~48900
9999 SILVER:~93200

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Disclaimer:
The information provided in this article is for informational purposes only and reflects the views of industry experts. Before making any investment decisions, it is recommended that you consult a financial advisor. The team at Gold Price Today does not engage in personal buying, selling, or trading of gold or silver on exchanges. We are not responsible for any gains or losses incurred based on the information presented here.

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