Gold prices may stay positive as traders await Fed's decision Analysts

New Delhi, Dec 7: Gold prices are likely to remain firm in the coming week, driven by investor focus on the US Federal Reserve's monetary policy outcome, combined with weakness in the rupee, according to analysts.

The precious metal's bias remains positive amid expectations of an interest rate cut and sustained central bank purchases, they added.

"Gold is expected to remain on positive side as traders will be focusing on the US Federal Reserve's FOMC meeting outcome and the Fed Chair Jerome Powell's commentary as well, while on the data front, the focus will be on China's trade and inflation data and the US jobs data," Pranav Mer, Vice President, EBG - Commodity & Currency Research, JM Financial Services Ltd, said.

On the Multi Commodity Exchange (MCX), gold futures appreciated by Rs 958, or 0.74 per cent, this week, outperforming the global prices.

"Gold prices in the Indian markets have rallied more than the Comex gold prices on account of rupee depreciation against the dollar. The rupee is now at the highest mark of 90, which makes gold in Indian currency costlier," Prathamesh Mallya, DVP - Research, Non-Agri Commodities and Currencies, Angel One, said. Mallya added that the rally in gold prices might continue in the week ahead as a boost from the rate cut, increasing central bank demand for gold, and fund buying. In the international markets, Comex gold futures slipped by USD 11.9, or 0.28 per cent, during the week. Mer noted that gold prices consolidated within a range during the week but stayed supported by a weaker dollar and rising bets for an interest rate cut by the Federal Reserve (Fed) at its December 10 meeting. Meanwhile, silver continues to outshine gold, scaling fresh record highs on industrial demand. On the MCX, silver futures skyrocketed by Rs 8,427, or 4.81 per cent, during the week. On Friday, the white metal surged by Rs 7,096, or 3.98 per cent, to hit a record of Rs 1,85,234 per kilogram.