Gold prices are holding firm in early Asian trade following a swift rebound from their initial drop after the Federal Reserve’s recent policy stance.
The Fed’s indication of fewer rate cuts than anticipated caught traders off guard, triggering a pullback in gold as rising yields improved the appeal of interest-bearing assets.
Picture: Gold hovers near 2597, seeking direction as momentum moderates, as seen on the VT Markets app.
The chart shows gold hovering near 2597 after a mild uptick from the 2583 region. Short-term moving averages flatten and converge near the current price, suggesting a pause in recent momentum. The MACD lines indicate the strong directional push seen earlier has cooled.
Traders may monitor whether price can hold above 2583 support, as a break below could attract more sellers, while clearing 2600 could re-engage buyers for a gradual push higher.
Despite this stabilisation, research analysts caution that India’s weakening demand may challenge gold’s short-term outlook.
Indian officials expect December imports to fall significantly, citing reduced seasonal buying and fewer major festivals. Traditionally, India’s robust appetite for physical gold has provided a steady floor under prices, but with fewer cultural events driving purchases, the demand pipeline looks thinner heading into year-end.
Traders should watch for changes in global yield environments and any signals of economic reacceleration that could influence monetary policy.
For now, with the Fed’s path set on fewer cuts and India’s demand waning, gold’s balance between safe-haven interest and physical market fundamentals may remain delicate in the weeks ahead.
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