Gold prices jumped over 1% on Thursday, December 19, recovering from a one-month low. Short-covering drove the rebound as traders awaited crucial US economic data for further insights into the Federal Reserve’s monetary policy path.

Spot gold rose 0.8% to $2,607.88 per ounce by 0251 GMT.

However, US gold futures eased slightly, down 1.2% to $2,620.60.

In India, 22-carat gold is priced between ₹71,510 and ₹71,660 per 10 grams.

The 24-carat gold rate today ranges from ₹78,160 to ₹83,649 per 10 grams.

Factors influencing gold prices

Gold’s recovery is attributed to short-term speculators buying the dip.

Kelvin Wong, Senior Market Analyst at OANDA, said, “Short-covering is pushing gold higher after it briefly touched the psychological $2,600 per ounce level.”

Market participants are closely monitoring US GDP and jobless claims data, as well as the upcoming core Personal Consumption Expenditures (PCE) index.

A higher-than-expected PCE reading, particularly above 3%, could pressure gold prices.

The metal dipped earlier this week following the Fed’s 25-basis point rate cut and indications of fewer rate reductions through 2025.

Fed Chair Jerome Powell emphasised the need for more progress in reducing inflation before further easing.

Gold outlook

Rahul Kalantri, VP Commodities at Mehta Equities, noted that gold is trading in a narrow range near $2,650 per ounce, influenced by geopolitical tensions, and weakness in equity markets.

“Gold has support at $2,590-$2,572 per ounce and resistance at $2,624-$2,640 per ounce,” he added.

Renisha Chainani, Head Research – Augmont – Gold For All, added, “The Federal Reserve, as expected, lowered its benchmark policy rate for the third time since September and signalled that rate reduction would halt, causing a sell-off in the precious metals market. If gold sustains below $2600 per ounce (₹75800 per 10 grams), we could see the selloff continuing up to $2550 per punce (₹74900 per 10 grams) in the last few days of December. If prices rebound, it can bounce back to $2680 per ounce (₹77000 per 10 grams).”

Darshan Chauhan , Director, Sky Gold, said, “Looking ahead, we foresee a robust trajectory for gold, with prices potentially reaching $3,000 per ounce by mid-2025, coinciding with Akshay Tritiya—a period of traditionally high demand for the metal. Demand remains stable, with an expected increase between January and March 2025, likely driving volumes higher. “

Investment strategy

Gold is expected to trade between $2,590 and $2,640 per ounce in the short term, with strong support in the ₹75,860-₹75,640 per 10 grams range.

Despite fluctuations, gold remains a preferred hedge against economic uncertainty and inflation.

Indian investors should monitor global cues and Fed updates to time their gold purchases.

–With agencies inputs