Synopsis: Gold prices surged on Jerome Powell's cautious Fed remarks, MCX June 2024 futures opened at Rs.71,278 per 10 gm, up Rs.550. COMEX gold rose over 0.75% to $2,328 per troy ounce. Anuj Gupta, HDFC Securities, noted a weakening US dollar index. Sugandha Sachdeva, SS WealthStreet, sees resistance at $2400 per ounce or Rs.72,600 per 10 gm.
Gold prices experienced a significant surge today following comments made by Jerome Powell during the US Federal Reserve meeting, where he downplayed speculations of an imminent rate hike. This news buoyed investor sentiment towards the precious metal. On the Multi Commodity Exchange (MCX), gold futures for June 2024 delivery opened at Rs.71,278 per 10 grams, marking an increase of Rs.550 compared to the previous day's closing price. Similarly, on the COMEX, the international benchmark for gold prices, the precious metal saw a substantial rise of over 0.75%, reaching $2,328 per troy ounce.
Anuj Gupta, Head of Commodity & Currency at HDFC Securities, observed that the cautious stance adopted by the US Federal Reserve triggered profit-booking activities in currency markets. As a result, the US dollar index, which measures the value of the US dollar against a basket of major currencies, retreated to 105.50 levels after hovering close to 106.50 levels earlier in the week.
According to Sugandha Sachdeva, Founder of SS WealthStreet, the rebound in gold prices can be attributed to the Federal Reserve's indication of a potential easing cycle in monetary policy. She emphasized that despite the recent uptick in gold prices, the Federal Reserve remains cautious and is closely monitoring inflation indicators. Sachdeva highlighted the central bank's commitment to economic stability and its reluctance to implement premature policy actions that could disrupt financial markets.
Looking ahead, Sachdeva predicted that gold prices may find support around the $2300-2280 per ounce range in international markets and the Rs.70,500-70,400 per 10 grams range in domestic markets. However, she cautioned that significant resistance is expected around the $2400 per ounce mark or Rs.72,600 per 10 grams level in the near term. This resistance level indicates a potential ceiling for gold prices in the coming days, suggesting that further price appreciation may encounter obstacles at this level.
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. Why did gold prices surge recently?
Gold prices surged recently following comments made by Jerome Powell during the US Federal Reserve meeting, where he downplayed speculations of an imminent rate hike.
Investors interpreted Powell's cautious stance as a sign of potential economic uncertainty, prompting increased interest in gold investments.
2. How did the US dollar index affect gold prices?
The weakening US dollar index, triggered by the cautious stance of the US Federal Reserve, contributed to the surge in gold prices.
As the US dollar retreated, investors turned to gold as a safe-haven asset, driving up its demand and prices.
3. What is the outlook for gold prices in the near term?
Analysts predict that gold prices may experience support around the $2300-2280 per ounce range in international markets and the Rs.70,500-70,400 per 10 grams range in domestic markets.
However, significant resistance is expected around the $2400 per ounce mark or Rs.72,600 per 10 grams level in the near term.
4. How does the RBI's stance impact gold prices?
The RBI's cautious approach towards monetary policy and its indication of a potential easing cycle can influence investor sentiment and impact gold prices.
Investors may view the RBI's stance as a signal of economic uncertainty, prompting them to seek safe-haven assets like gold.
5. What are the key factors driving gold prices?
Gold prices are influenced by various factors including central bank policies, geopolitical tensions, inflation expectations, and movements in the US dollar index.
Investor sentiment towards riskier assets and economic indicators also play a significant role in determining gold prices.
