Synopsis: The recent speech by Jerome Powell, the chairman of the US Federal Reserve, has led to a notable increase in gold prices. This surge in gold rates reflects growing speculation among investors regarding a potential rate cut by the Federal Reserve. As a result, investors are contemplating whether it's the right time to invest in gold or wait for further developments.
The gold market experienced a significant surge in response to Jerome Powell's recent speech, which sparked speculation of a potential rate cut by the US Federal Reserve. Investors are now faced with the question: Is it time to buy or wait?
Today's gold rates reflect the impact of Powell's speech, with gold futures contracts on the Multi Commodity Exchange (MCX) for June 2024 expiry opening at an upside of Rs 72,336 per 10 grams. Shortly after, prices climbed to an intraday high of Rs 72,444. This upward movement in gold prices follows a trend observed in recent years, where economic factors have steadily driven gold prices higher.
In the international market, spot gold prices hover around Rs 2,360 per ounce, while COMEX gold prices are quoted at Rs 2,365 per troy ounce.
Insights from seasoned commodity market experts suggest that the positive outlook provided by Powell on the US economy has fueled the surge in gold prices. The anticipation of a US Fed rate cut serves as the primary driver behind this upward momentum. Analysts identify strong support for MCX gold rates today at the Rs 71,900 mark, with a potential hurdle at Rs 72,800 per 10 grams. However, they anticipate a target of Rs 73,200 per 10 grams once gold prices surpass the Rs 72,800 hurdle.
Anuj Gupta, Head of Commodity & Currency at HDFC Securities, attributes today's uptrend in gold prices to Powell's optimistic economic outlook and the resulting speculation of a US Fed rate cut.
The Kotak Securities report indicates that gold prices are rising in anticipation of the US Consumer Price Index (CPI) data release scheduled for May 15, 2024. This data release is expected to have a significant impact on gold prices.
Overall, experts remain bullish on gold prices for the day, with major support at Rs 71,900 and a hurdle at Rs 72,800 for MCX gold rates. In the international market, spot gold prices have established a strong base at $2,320 per ounce, with potential targets at $2,380 and $2,400 per troy ounce.
Given the expected uptrend in gold prices, Anuj Gupta advises investors to maintain a buy-on-dips strategy in the intraday session.
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies. We advise investors to check with certified experts before making any investment decisions.
Related Questions
1. What factors influenced the recent surge in gold prices?
The recent surge in gold prices has been influenced by factors such as Jerome Powell's speech, speculation regarding US Fed rate cuts, and anticipation of US CPI data release.
2. How did the US Fed chairman's speech impact gold prices?
Jerome Powell's positive outlook on the US economy in his speech triggered speculation about a potential US Fed rate cut, leading to an increase in gold prices.
3. What is the expected impact of the US CPI data release on gold prices?
The US CPI data release, scheduled for May 15, 2024, is anticipated to have a significant impact on gold prices as it may influence market sentiment and inflation expectations.
4. How do experts forecast the future movement of gold prices?
Experts forecast the future movement of gold prices based on factors such as economic indicators, central bank policies, and geopolitical events.
5. What strategies are recommended for gold investors amidst the current market conditions?
Amidst the current market conditions, gold investors are recommended to maintain a buy-on-dips strategy to capitalize on potential uptrends in gold prices.
