Gold will trade sideways in December

Mumbai-India (Dec 1)  Gold went down by almost 2% this week. Prices broke the important support level of 29,360 and drifted towards the intermediate support level of 29,000. Prices have respected this support level and we have seen a minor pullback in it.

 Gold prices continued to trade within range as there has not been many fundamental or economic drivers for the prices so far.

 The prices have been locked in a range between 29,000 and 29,700 for over 2 months now and there have been no convincing signs of a breakout as prices continue to move up and down within range.

 We expect Gold prices to trade sideways as market as already priced in the rate hike in the US in December.

 We do not expect to see much increase in the strength of the dollar over the next month or so as the Fed transitions from Yellen to Powell. Hence, we believe that the gold prices could continue to range during this period. December will be a month of low liquidity as most of the Fund Managers will be on leave for Christmas during year end.

HFL