Gold rate today: The international gold market saw prices soar to a six-week high at $2,391 per ounce due to growing optimism for a US Fed rate cut and weakness in the US dollar rates. In the domestic market, gold futures on the MCX for the August 2024 expiry crossed the psychological threshold of ₹73,000 with a 2 percent weekly gain last week. Closing Friday’s trading, the MCX saw a surge of ₹671 per 10 gm, ending at ₹73,038. Silver prices also climbed to a four-week high of $31.20 per ounce in the international market.
Experts in the commodity market see the current uptrend in gold prices as a result of the expected US Fed rate cut weakening the US dollar rate. A rate cut usually leads to a weaker US dollar, making gold more appealing to investors. Additionally, concerns about US inflation have eased after positive US job data and the US core PCE index showing the lowest annual increase in over three years, further boosting gold’s appeal.
Triggers for gold price rally
Anuj Gupta, Head of Commodity & Currency at HDFC Securities, attributed the surge in gold prices to the rising optimism for a US Fed rate cut, which has pressured the US dollar rate downward. The US dollar index falling below the 105 mark reflects this shift in market dynamics.
Sugandha Sachdeva, Founder of SS WealthStreet, highlighted how the anticipation of an interest rate cut by the US Federal Reserve sooner than expected has driven gold prices up by over 2 percent. The recent data showing a decline in US core PCE index and easing economic price pressures indicate a higher likelihood of the central bank lowering interest rates in the upcoming meeting.
The US economy adding 206,000 jobs in June, despite some concerning indicators like rising unemployment and slowed wage growth, has provided an additional boost to gold prices. The overall picture of a cooling labor market and decelerating inflation has fueled buying interest in gold as a safe haven asset.
Gold price today: Important levels to watch
“Price structure suggests that the precious metal has found good support around Rs.70700 and then at ₹72,200 per 10 gm mark and looks to continue with the upward momentum towards ₹73,700 and ₹74,200 per 10 gm zone or around $2,420 per ounce mark in the coming days,” according to Sugandha.
Factors that may dictate gold price
Sugandha Sachdeva pointed out that upcoming US Consumer Price Index (CPI) data for June will be crucial in influencing the central bank’s rate-cut decisions and, subsequently, impacting gold prices. The CPI data will play a significant role in confirming whether inflation is indeed cooling, which could support the case for a rate cut and push gold prices higher.
Disclaimer: The views and recommendations above are those of individual analysts or broking companies, not Mint. We advise investors to check with certified experts before making any investment decisions.
Insight:
– It is important for investors to stay informed about macroeconomic factors such as inflation rates, job data, and central bank decisions that can influence the price of gold.
– The interplay between the US dollar rate, interest rate cuts, and economic indicators can provide valuable cues for predicting the movement of gold prices in the market.
