Gold and silver rates today: Despite the rise in the US dollar rates, gold and silver prices continue flirting with record highs throughout the week on US Fed rate cut buzz. Gold futures contract on the Multi Commodity Exchange (MCX) for June 2024 expiry climbed to a new peak of ₹70,699 per 10 gm on Friday. Silver rates too climbed to a new peak of ₹81,030 per kg on the last session of the week gone by. In the international market, spot gold price finished at the 2,329 per ounce level after touching a new high of $2,230.47 per ounce whereas silver price ended 2.10 percent higher at the $27.46 per ounce mark.
Top 5 reasons for gold, silver price rally
According to commodity market experts, gold and silver prices have rallied throughout the week as the market is expecting the end of a high-interest rate regime in the near term. They listed 5 major reasons that have been fueling precious metal prices despite the strong US dollar index. Those 5 reasons are the bets of the US Fed rate cut, rising geo-political risk, aggressive buying by China, uncertainties ahead of general elections in major economies, and depreciating Indian National Rupee (INR).
On why gold and silver prices are skyrocketing, Sugandha Sachdeva, Founder of SS WealthStreet said, “It’s been a remarkable rally in gold price as it scaled to another record high of ₹70,699 per 10 gm and logged gains for the third consecutive week despite resilient US dollar rates. The key variable propelling prices on the higher trajectory has been the rising bets about monetary policy easing by the US Fed and the worsening geopolitical situation in the Middle East region. Another key catalyst buoying gold and silver prices has been aggressive buying by China in recent weeks. Sustained central bank buying and the uncertainty stemming from forthcoming elections in major economies this year is also enhancing the appeal of gold as a safe-haven asset. Further, the Indian rupee has been inching lower, which is also supporting prices at the domestic markets.”
US non-farm payroll data
On the immediate trigger for gold and silver prices climbing to a new peak on Friday evening, Anuj Gupta, Head of Commodity & Currency at HDFC Securities said, “Gold and silver prices touched a new peak on Friday after the release of better-then-expected US non-farm payroll data. As per the data released on Friday last week by the Bureau of Labor Statistics, the US labour market has added 3.03 lakh non-farm payroll jobs in March 2024, which pulled down the unemployment rate from 3.9 percent to 3.8 percent.”
US Fed rate cut buzz
Pointing towards the ease in the monetary policy of the US Federal Reserve, Sugandha Sachdeva of SS WealthStreet said, “Gold prices breached the phycological Rs.70000 per 10gm mark and the key $2300 per ounce mark in continuation of its steep rally seen since mid-February. Despite mixed signals from the US Fed officials regarding rate cuts during the week, market sentiment leans towards expectations of a rate cut in June due to receding price pressures in the US economy.”
Gold price outlook
“The recent robust US jobs report, with higher-than-expected job additions in March but contracting wage growth, adds to the complex dynamics influencing gold prices. Looking ahead, the trajectory of gold prices may hinge on upcoming US inflation data scheduled next week. Nonetheless, the overall trend remains bullish, with intermittent dips presenting potential buying opportunities,” said Sugandha Sachdeva. The SS WealthStreet expert went on to add that the overall trend remains bullish, with intermittent dips presenting potential buying opportunities.
“In the coming days, we anticipate gold prices to test the ₹72,000 per 10 gm mark or $2380 per ounce mark. Investors should closely monitor economic indicators and geopolitical developments for potential impacts on gold prices while staying attuned to buying opportunities amid the bullish trend,” Sugandha concluded.
Expecting further rise in gold prices, Shiju Koothupalakkal, Technical Research Analyst at Prabhudas Lilladher said, “Gold prices have given technical breakout at ₹69,600 level and has closed above ₹70,500 per 10 gm mark. This augurs well for the precious metal rally and any dip from here should be seen as a buying opportunity by medium to long-term investors. The yellow metal may go up to ₹74,200 per 10 gm mark in the short to medium term.”
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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