Gold Prices Slip on Profit Booking: What Comes Next and How Investors Should Plan Their Strategy

Gold prices retreated once again on November 27 following a fresh round of profit booking, raising questions about the metal’s short-term trajectory and the right investment approach going forward. The decline comes just a day after global prices touched a two-week high, prompting traders to lock in quick gains.

On the domestic futures market, gold slipped sharply during the afternoon session.

On the Multi Commodity Exchange (MCX), the December gold futures contract dropped by ₹645 from the previous close, hitting an intraday low of ₹1,25,286 per 10 grams. A similar trend was visible in the international market. According to Reuters, spot gold fell 0.5% to $4,145.08 per ounce, while the December US gold futures declined 0.6% to $4,140.80 per ounce.

The correction is largely attributed to heavy profit booking. With prices recently touching multi-week highs, investors preferred booking profits ahead of fresh global cues, putting short-term pressure on the metal.

Market Focus Shifts to the Federal Reserve

One of the biggest triggers for gold’s next major move is the upcoming policy decision from the Federal Reserve. Market participants are closely watching whether the Fed will opt for an additional interest rate cut at its December meeting.

Recent comments from key officials, including Fed Governor Christopher Waller and New York Fed President John Williams, indicate rising concerns about weakening labour market conditions.

Several policymakers have signaled that a rate cut could be appropriate if domestic economic data continues to soften. However, they also stressed that the final decision will depend on updated economic indicators, many of which were delayed due to the temporary government shutdown.

If the Fed indeed announces a rate cut, gold prices may gain strong upward momentum. Lower interest rates typically reduce the appeal of government bonds and other fixed-income securities, pushing investors toward safer assets like gold and silver.

Mixed Trend in Silver

Silver futures, however, displayed strength in the domestic market. On MCX, December silver contracts surged by ₹2,663 to hit ₹1,63,935 per kilogram. Globally, spot silver slipped 0.9% to $52.89 per ounce, reflecting a mild correction after recent gains.

Analysts’ View: Key Support and Resistance Levels

Market experts remain cautiously optimistic about gold’s medium-term outlook. Rahul Kalantri, Vice President–Commodities at Mehta Equities, believes that gold is currently holding strong support at $4,130 per ounce.

For silver, the support level is near $52.65 per ounce. On the upside, gold continues to face resistance around $4,200 per ounce, while silver is struggling to break above $53.90 per ounce.

Investment Strategy: Slow and Steady Is the Way Forward

Financial advisors are advising investors to avoid large directional bets in the current environment and instead opt for a gradual investment approach. Feroze Azeez, Joint CEO at Anand Rathi Wealth, recently said on CNBC Awaaz that staggered investing is more suitable for gold at the moment.

A lump-sum investment may not be ideal given the ongoing volatility.

He further added that long-term gold investors should keep realistic return expectations. While short-term returns have been impressive in recent years, gold’s long-term performance remains moderate. Over the past decade, gold has delivered around 14% compounded returns, and going forward, investors should expect an annual return in the range of 9–11% over a 5–7 year horizon.

Expected Trading Range in the Coming Days

According to Prithviraj Kothari, Managing Director of RiddiSiddhi Bullions and President of IBJA, both gold and silver are reacting primarily to expectations of further rate cuts. With dovish commentary from policymakers, gold is likely to trade between $4,000 and $4,200 per ounce (₹1.21–1.27 lakh per 10 grams). Silver is expected to move within the $49–53 per ounce range (₹1.50–1.60 lakh per kilogram).

Opportunity for Long-Term Investors

The current price dip offers a buying opportunity for long-term investors. Experts suggest gradually accumulating physical gold or choosing investment vehicles such as Sovereign Gold Bonds (SGBs) and digital gold. The recent correction can serve as a reasonable entry point for those planning to build or expand their gold portfolio.