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Gold rate today jumps after disappointing US non-farm payroll data, slide in US dollar rate, Xi Jinping’s Europe trip


Gold rate today: The release of disappointing US non-farm payroll data last week, coupled with the ongoing weakness in the US dollar rates, has led to a rebound in gold prices today. The gold futures contract for June 2024 expiry on the Multi Commodity Exchange (MCX) opened on a positive note this morning at 70,849 per 10 gm. It quickly reached an intraday high of 70,984 per 10 gm. In the international market, the COMEX gold price is hovering around $2,320 per troy ounce, while the spot gold price is around $2,310. Experts in the commodity market attribute this rise in gold prices to the weak US dollar and the disappointing US non-farm payroll data. The latter has particularly impacted the US dollar, renewing the US Fed’s concerns over the US economy, especially inflation.

US dollar rate in focus

Speaking on the reasons fueling gold prices today, Anuj Gupta, Head of Commodity & Currency at HDFC Securities, said, “Gold rates today bounced back as the US dollar price has come under pressure after the weak US non-farm payroll data. In the US, non-farm payroll data was released on Friday last week. The US Labour Department reported 1.75 lakh job creations in April 2024, whereas the market estimated 2.43 lakh new jobs. This has renewed the concerns regarding the US economy, especially the US inflation that the US Fed recently raised during the FOMC meeting.”

Anticipating further upside in gold price in the near term, Kaynat Chainwala, Senior Manager-Commodity Research at Kotak Securities said, “COMEX Gold prices edged higher on Monday as a softer-than-expected US jobs report spurred expectations of an earlier rate cut, pushing market bets on a September rate cut to 80% and increasing speculation of a second rate cut in the November or December meeting. Gold prices witnessed a second weekly decline as easing geopolitical tensions, expectations of fewer rate cuts for the year, and a more positive outlook for global economic growth dampened haven demand. However, the Organisation for Economic Co-operation and Development (OECD) has revised its outlook for the global economy upward, to 3.1% this year and 3.2% in 2025, from October forecast of 2.9% and 3% respectively, citing stronger-than-expected growth in the US and China. Gold may see some recovery supported by fears of escalating geopolitical tension in the Middle East and a softer dollar.”

Xi Jinping’s Europe trip in focus

Turning to the Chinese President Xi Jinping’s Europe visit, Anuj Gupta of HDFC Securities noted, “There’s also a sentimental boost from the Chinese market. The market is anticipating significant outcomes from the Chinese President’s Europe trip, given the ongoing geopolitical tension between Ukraine and Russia, now in its third year, and a fresh crisis in the Middle East. Additionally, the market is hopeful for positive business outcomes for the dragons, considering China’s significant role in the global metal market.”

Gold price today: Important levels to watch

With his extensive knowledge and experience, Anuj Gupta of HDFC Securities provided valuable insight, “MCX gold rate today has immediate support at 70,500 per 10 gm whereas it is facing resistance at 71,200. The gold price may touch 71,600 per 10 gm mark on breaching this resistance. In the international market, COMEX gold price has major support placed at $2,300 per troy ounce while facing a hurdle at $2,330 per troy ounce.” This analysis, backed by his expertise, can serve as a useful guide for investors and traders in their decision-making process.

Disclaimer: The views and recommendations provided in this analysis are those of individual analysts or broking companies, and not Mint. We strongly advise investors to consult with certified experts before making any investment decisions, as market conditions can change rapidly and individual circumstances may vary.

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