Soon after trading opened on Thursday, gold price surged to a record high of 66,778 per 10 gram on Multi Commodity Exchange (MCX) futures for April 2024 expiry. The yellow metal opened at Rs 66,100 per 10 gm on the back of US Federal Reserve’s decision to keep interest rates steady at 5.25-5.5 per cent.
Spot gold prices climbed to a record high as the U.S. dollar and bond yields ticked lower soon after Fed Chair Jerome Powell maintained its projection of three rate cuts for this year. Lower interest rates decrease the opportunity cost of holding non-yielding bullion and weigh on the dollar.
Spot gold was up 2.07 per cent at $2,205.80 per ounce after hitting an all-time high of $2,222.39 earlier in the session. Silver, on the other hand, advanced 2.83 per cent at $25,815 per ounce.
“It’s the goldilocks scenario for gold prices, where marginally higher inflation expectations meet lower nominal rates to create decreased real yields,” said Kyle Rodda, a financial market analyst at Capital.com to Reuters.
“A dovish Fed, a little squeeze on existing shorts, and a touch of momentum chasing have boosted bullishness in the gold market.”
“With Powell keeping three potential rate cuts in play this year, bond yields and the USD dipped, which opened a pathway higher for the gold price,” said Tim Waterer, chief market analyst at KCM Trade, said in a note.
The dollar slipped to a one-week low against its rivals with dollar index trading 0.11 per cent lower at 102.90. The benchmark U.S. 10-year Treasury yields also dipped.
-With inputs from agencies
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First uploaded on: 21-03-2024 at 11:25 IST
