Gold rate today, 26 Feb 2024: Amid speculations of a positive outcome in the US Q4 GDP data to be released on Wednesday this week, the US dollar index regained 104 level in early morning deals and touched a two-month high. This put gold rate today under pressure on Monday morning session in the Asian stock market today. Gold futures contract on the Multi Commodity Exchange (MCX) for April 2024 expiry opened lower at ₹62,327 per 10 gm level and went on touch an intraday low of ₹62,198 per 10 gm. However, the yellow metal witnessed buying interest at the lower levels and the MCX gold rate came above the ₹62,200 level. In the international market, spot gold price is oscillating around $2,032 per ounce level.
According to commodity market experts, the gold rate today is under pressure as the US dollar index has climbed to a two-month high. They said that the rise in the US dollar rates can be attributed to the market estimates regarding the US GDP data for the fourth quarter of the current fiscal. They said that the market is expecting 3.3 percent US GDP data in Q4FY24, which is neutral because the US GDP in the previous quarter was also at 3.3 percent. This is expected to keep the inflation pressure intact and the market is expecting it as a negative outcome from the US Fed rate cut perspective.
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US GDP data in focus
Speaking on the reason for the dip in gold rate today, Anuj Gupta, Head — Commodity & Currency at HDFC Securities said, “Gold prices are under pressure as the US dollar index has touched a two-month high during morning deals. This rise in the US dollar index is because of the market expectations of a 3.3 percent US GDP data in the fourth quarter of the current financial year. In case the US GDP data comes below the market estimates, then, in that case, the US dollar rate may come under more buying rush as a weak US GDP data would mean persisting US inflation pressure on the US economy.”
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Anuj Gupta of HDFC Securities went on to add that 3.3 percent of US GDP in Q4 is neutral and this won’t be enough for the US Fed officials to think about interest rate cuts. However, in case the US GDP data comes above 3.3 percent then in that case US dollar rates may come under sell-off pressure on the US Fed rate cut buzz in the near term meeting.
Triggers for gold price this week
On other reasons that have put the yellow metal under pressure, Sugandha Sachdeva, Founder of WealthWave Insights said, “The US Fed’s stance, as reflected in the minutes of its recent meeting, signaled a reluctance towards early rate cuts. Concerns were voiced regarding the premature easing of rates, especially given the persistent challenges in achieving the targeted 2 percent inflation rate. Furthermore, remarks from a Fed official underscored the central bank’s cautious approach, citing the January CPI data as evidence of persisting inflationary pressures. These indications, coupled with lower-than-anticipated jobless claims data, prompted investors to recalibrate their expectations, dampening hopes for an imminent rate cut and consequently restraining upward momentum in gold prices.”
Important levels to watch
Sugandha Sachdeva went on to add that the key resistance level looms for gold prices, with ₹62,700 per 10 gm and $2,048 per ounce serving as a significant hurdle. A decisive breach of these thresholds could pave the way for further upside potential in the precious metal, signaling renewed bullish sentiment among investors.
“While gold navigates through a confluence of market dynamics, including geopolitical uncertainties and central bank policy stances, its resilience in the face of headwinds underscores its status as a coveted asset class,” Sugandha concluded.
Disclaimer: The views and recommendations above are those of individual analysts, experts, and broking companies, not of Mint. We advise investors to check with certified experts before making any investment decisions.
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