Gold prices inched up by 0.08%, settling at 60111, driven by indications of slowing U.S. inflation, suggesting a potential pause in Federal Reserve interest rate hikes. The significant drop in U.S. consumer inflation for October, with an annual headline CPI growth of 3.2%, below estimates of 3.3%, marks the slowest inflation growth in over two years. Federal Reserve Chairman Jerome Powell emphasized the commitment to tightening monetary policy to control inflation, considering it a priority.
However, Richmond Federal Reserve Bank President Thomas Barkin noted that supply shortages partially offset core inflation, expressing caution about a smooth return to the 2% target for Core CPI. Despite progress in inflation control, Barkin urged the Fed to do more to address demand and inflation concerns. The latest inflation figures favour maintaining interest rates between 5.25-5.50%, as reflected in declining Retail Sales, primarily influenced by reduced automobile demand due to higher interest rates impacting household living costs.
From a technical standpoint, the gold market experienced short-covering, with a -6.06% drop in open interest to 9470, while prices rose by 46 rupees. Support is identified at 59935, with a potential test of 59760 below, and resistance is anticipated at 60365, with a breakthrough possibly leading to a test of 60620.
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