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Gold shines for second week in row on US interest rate cuts; silver reaches 11-year high

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Gold prices seemed set for a second consecutive weekly gain on Friday, boosted by China’s stimulus measures and renewed optimism about U.S. interest rate cuts. Silver also surged past the $30 mark, reaching an 11-year high.

By 1745 GMT, spot gold had increased by 1.5% to $2,412.83 per ounce, approaching its all-time high of $2,431.29 set on April 12. Meanwhile, U.S. gold futures closed 1.3% higher at $2,417.40 per ounce.

Also read: Gold’s future hinges on Fed rate cuts and dollar weakening, says Emkay report

“Gold prices have reacted positively in recent days due to expectations of sooner interest rate cuts, following a drop in US inflation data after a long period of sideways to higher rates. This shift has led to speculation that the Federal Reserve might cut rates starting in September. Additionally, Iran’s President’s helicopter crash prompted a strong push in gold prices on Monday due to fears of renewed tensions between Iran and Israel. However, prices have given up some gains today as no definitive cause for the crash has emerged,” said -Jateen Trivedi, VP Research Analyst – Commodity and Currency, LKP Securities.

Spot gold prices have risen by more than 2% this week. Simultaneously, the London gold price benchmark closed the week at an all-time high of $2402.60 per troy ounce, according to the London Bullion Market Association (LBMA).

“Gold is trading slightly lower on profit-booking, after hitting an all-time high in early trades. The underlying momentum remains positive amid rising bets for an early rate cut by the Federal Reserve after the incoming data has shown signs of slowdown in economic activity as well as cooling inflation. However, comments from some of the Fed officials suggest rates are likely to stay higher for longer. Overall, the bullion remains supported by policy uncertainty, geo-political tensions, portfolio diversification among investors, and safe-haven support,” said Pranav Mer, VP – Research (Commodity & Currency) BlinkX and JM Financial.

According to its latest Navigator report, Emkay Wealth Management cited that gold may be able to sustain at higher levels only if the Fed cuts rates, and the US$ starts declining against currency majors.

Also read: Gold price today: MCX Gold falls over half a per cent; what should be your strategy for bullion today?

As of 30th April, 2024, physical gold has delivered a CAGR of 19.42 per cent in 12-month period and absolute returns of 6.78% (1-month period) during the month of April.

Spot silver surged 4.8% to $31.02 per ounce after surpassing a significant resistance level at $30. The last time silver reached the $30 mark was in early 2021, but maintaining that level for an extended period has been challenging for over a decade.

Platinum increased by 2.3% to $1,081.37, reaching a one-year high on Thursday. The metal has risen 9% this week due to ongoing structural deficits. Palladium climbed 1.2% to $1,007.

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