Gold rate today: With the U.S. dollar rates and U.S. Treasury yields both sliding, the price of gold witnessed strong buying in early trading today. The gold futures contract on the Multi Commodity Exchange (MCX) for August 2024 expiry started higher at ₹72,879 per 10 gm and quickly reached an intraday high of ₹72,958. In the international market, the spot gold price is hovering around $2,368 per ounce, while the Comex gold price stands at approximately $2,387 per troy ounce.
US dollar hits two-month low
One of the main drivers of the current gold price increase is the weakening of the U.S. dollar. Anuj Gupta, Head of Commodity & Currency at HDFC Securities, noted that the US dollar index approaching the 104 level and the US dollar price in the forex market hitting a two-month low have led to this shift. As a result, there has been profit booking in the US treasury market, causing a drop in the US treasury yield. This has prompted investors to move their funds from currency and bond markets to alternative assets, including gold.
Explaining the decline in the US dollar price, Tim Waterer, Chief Market Analyst at KCM Trade, mentioned, “Buyers have been avoiding the U.S. dollar today following the weak ADP data ahead of the non-farm payrolls data (NFP), contributing to the increase in the price of gold.”
US Fed rate cut buzz
As the possibility of Fed rate cuts in the second half of the year looms closer, Tim Waterer suggested that gold’s fundamental outlook remains positive. He also highlighted that if a robust NFP figure is reported, the $2,300 level could come under consideration on the downside.
US job data in focus
Anticipation is high for the forthcoming US job data release, which is a crucial indicator of the US economy’s health. Anuj Gupta advised that gold prices are likely to range between ₹72,000 and ₹73,800 as investors await this data, set to be released on Friday. The outcome of this data can significantly impact the gold market, and being mindful of this event can help traders make well-informed decisions.
Anuj Gupta further recommended a ‘buy-on-dips’ strategy for gold investors, providing a strategic direction for their trading activities.
(With inputs from Reuters)
Disclaimer: The views and recommendations mentioned above are courtesy of individual analysts, experts, and broking firms, not Mint. It is advisable for investors to consult certified experts before making any investment decisions.
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Published: 06 Jun 2024, 10:00 AM IST
Insight: An additional insight into the gold market is the impact of geopolitical tensions and inflationary pressures on the price of gold. Geopolitical tensions in regions such as the Middle East or economic uncertainty due to inflation can drive investors towards safe-haven assets like gold, leading to price fluctuations. Monitoring these factors alongside the market trends can provide a comprehensive understanding of gold price movements.
