Gold in the international market consolidated within a tight range of $6, as trading on Monday saw investors watching for potential catalysts within the holiday week. Rates by the end of trading on Monday 19th November were held above $1,220 as the dollar came down a bit due to uncertainty over the United States interest rates being set by the Fed.
Spot gold in the international market decreased by some 0.1 percent and fell to $1,220.63 per ounce. This fall was witnessed after the prices hit a weekly high of $1,225.29 during the previous sessions.
United States gold futures also witnessed the brunt of the market, as they came down by some 0.2 percent to reach the price of $1,221.10 per ounce.
“We will continue to see some consolidation between $1,200 and $1,250 for a couple of weeks until we see a kind of catalyst … this could be Brexit negotiations, the G20 meeting between the U.S. and China,” mentioned Hussein Sayed, who works as the chief market strategist at FXTM. He further said, “If we hear more dovish comments on the tightening cycle, this will drag the dollar lower and give another push to gold prices.”
The prices for the dollar drifted further down in the market, after the currency made its biggest weekly drop in a period of some two months. The drop was seen after the FED from USA raised concerns about the threat of a potential global crisis or slowdown of sorts in the coming days. The speculations have triggered doubts and panics over how long this rate-tightening cycle would run.
The FED has raised the rates for dollars some three times during this year. The increase in rates has meant that it is more expensive for investors to hold to a comparatively non-yielding option like gold.
“With America on holiday on Thursday on account of Thanksgiving Day, it’s going to be a very quiet week,” said Alasdair Macleod, who is the current head of research at GoldMoney.com.
“Unless we see more turbulence in emerging markets and industrialized country stock markets, then the outlook for gold is not positive,” an analyst based in Germany said.
The SPDR Gold Trust, which is one of the world’s largest gold-backed ETF, fell by some 0.2 percent to reach their lowest mark in a week during the week ended last Friday.
The 1,225 – 1,230 mark is believed to be a resistance level for gold prices, and investors will have a keen eye if gold can overtake this mark during the coming period. These speculations have been validated by senior experts with an eye on the market.
“After four days of upside, gold is at a normal profit booking level … 1,225-1,230 is a resistance zone for gold,” said Vandana Bharti, who is currently serving as the assistant vice-president of commodity research firm SMC Comtrade Ltd.
Gold prices are expected to maintain a similar tight range, if not gains, during the coming days, because of a weakening dollar.