Gold prices held steady in thin trade on December 29 in the international markets as weaker US Treasury yields countered the impact from a slight improvement in risk sentiment.
On the Multi- Commodity Exchange (MCX), gold contracts were down 0.19 percent, trading at Rs 47,949 for 10 grams at 9.59 am on December 29. Silver futures shed 0.14 percent to Rs 62,425 a kilogram.
Gold prices remained lower in early 2021 since it was in overbought zone, however, prices recovered by around Rs 6,000 per 10 gram from the low of Rs 43,300 due to strong demand from the domestic jewelry market. At the end of 2021, gold prices were trading firmly above Rs 48,000 per 10 grams, which is slightly down from December 2020, said Abhishek Chauhan, Head of Commodity & Currency at Swastika Investmart.
Rising cases of coronavirus variant Omicron and rising inflation may further support gold prices in 2022. Energy and the prices of the other essential commodities are soaring again due to supply interruption triggered by the pandemic, which may aid safe-haven demand. Chauhan expects gold prices to move towards Rs 54,000 and beyond in 2022.
Gold prices are trading in a tight range amid low volumes, and may remain in consolidation mode this week. However, the new year celebrations are fuelling the possibility of a spread of Omicron cases, which is why many countries have imposed several restrictions. The next few weeks would be crucial to decide the severity of Omicron after the holidays end. Any trigger will prove to be an upper breakout for gold prices.
Buy zone above Rs 48,100 for target of Rs 48,300 Sell zone below Rs 47,800 for target of Rs 47,600
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