Federal Reserve, Fed Rate Cut, Fed News: Gold and silver prices dropped sharply after the Federal Reserve released a cautious projection for 2025 rate cuts, indicating only two reductions, totaling 0.5%. Elevated inflation expectations further diminished hopes for substantial rate cuts next year. In Spot market gold reaches near 2600 Dollar.
The dollar index surged past 108, reaching its highest level this year, while the Indian rupee depreciated to an all-time low of 85.05 against the USD, driven by robust dollar demand and the Fed’s hawkish policies.
While the Fed cut interest rates by 25 basis points as expected, its guidance on future rate reductions dampened market sentiment. The Fed highlighted solid economic activity, a resilient labor market with a marginally higher unemployment rate, and inflation still above its 2% target. Consequently, expectations for 2025 rate cuts were revised down from 100 basis points to 50 basis points, pressuring precious metals further.
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Market analysts suggest the 0.25% rate cut was already priced in, limiting any upward movement in gold and silver. Attention now shifts to key U.S. economic data, including GDP figures and Initial Jobless Claims, due later today.
The Bank of Japan (BoJ), in its final meeting of the year, maintained its key interest rate at 0.25%, the highest since 2008, aligning with market expectations. Japanese Yen Weakens as BoJ Stays Steady on Rates
Key Price Levels
Manoj Kumar Jain, Director at Prithvi Finmart, noted that gold and silver are under short-term pressure following the Fed’s hawkish stance. Critical support levels are $2,588 and $29.88 per troy ounce for gold and silver, respectively. A failure to hold these levels on a weekly basis could result in a bearish trend.
For the international market, gold has support at $2,610-2,588 and resistance at $2,670-2,684 per troy ounce. Silver’s key levels are $29.88-29.50 (support) and $30.84-31.20 (resistance).
On the MCX, gold is supported at ₹76,000-75,350 and faces resistance at ₹77,000-77,500, while silver’s support is at ₹88,800-87,000, with resistance at ₹91,200-92,000.
Long-Term Outlook
Despite the current bearish pressure, Jain emphasized the positive long-term trend for gold and silver. He advised long-term investors to view dips as buying opportunities but recommended waiting for market stabilization before making significant additions to their portfolio
IIDM Update
Key resistance is located at 2610/2615 above which we can see an upside move towards 2625-2640.
Crucial support is seen at 2585 below which a further dip towards 2575-2560 can be seen
Big Events of The Week
Thursday, December 19, 2024
US
7:00 PM: GDP Growth Rate QoQ Final (Q3)
7:00 PM: GDP Price Index QoQ Final (Q3)
7:00 PM: Initial Jobless Claims (DEC 14)
7:00 PM: Core PCE Prices QoQ Final (Q3)
8:30 PM: Existing Home Sales (NOV)
United Kingdom (UK)
5:30 PM: BoE Interest Rate Decision
Friday, December 20, 2024
7:00 PM: Core PCE Price Index MoM (NOV)
7:00 PM: Personal Income MoM (NOV)
7:00 PM: Personal Spending MoM (NOV)
8:30 PM: Michigan Consumer Sentiment Final (DEC)
China
6:45 AM: Loan Prime Rate 1Y
6:45 AM: Loan Prime Rate 5Y
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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.