Gold faced a 1.56% decline, settling at 62369, driven by profit booking after achieving a record high. This dip came amidst increasing confidence in an anticipated interest rate cut by the U.S. Federal Reserve early next year. The metal had earlier surged to a peak of 64063 on renewed expectations of a rate cut, triggered by remarks from Federal Reserve Chair Jerome Powell.
Powell emphasized the need for a balanced approach to interest rates, acknowledging the risks of both excessive hikes and insufficient increases to control inflation. The Eurozone's 2.4% inflation drop in November fueled expectations of the ECB cutting rates faster than previously indicated. Traders are now pricing in a 70% chance of an ECB rate cut by March, according to CME's FedWatch Tool. Comex gold speculators demonstrated bullish sentiment, increasing their net long position by 29,517 contracts to 144,410 in the week to Nov. 28, as per CFTC data. Technically, the market is undergoing long liquidation, with a -4.29% drop in open interest to 17177, coupled with a price decrease of -988 rupees.
From a technical perspective, gold finds support at 61725, and a breach below this level may lead to a test of 61080. On the upside, resistance is expected at 63540, and surpassing this level could push prices to test 64710.
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