Gold prices gain as investors await crucial US inflation data this week

Gold prices gain as investors await crucial US inflation data this week

Gold opened on the Multi Commodity Exchange (MCX) at Rs 66,497 per 10 grams and hit an intraday low of Rs 66,465. In the international market, prices hovered around $2,196.32 per ounce.

Silver opened at Rs 74,779 per kg and hit an intraday low of Rs 74,744 on the MCX. In the international market, the price was around $24.69 per ounce.

Anuj Gupta, chief of commodity and currency at HDFC Securities, said, “Yesterday, gold prices increased by 0.38% and closed at 66367 levels. Recently, gold made a new high of 66356 levels. Silver prices closed on a positive note, up by 0.19% and closing at 74662 levels. Gold prices increased sharply due to geopolitical tension in the Middle East. Stable dollar index before US GDP data also provides support to bullions.”

Last week, bullion hit a record high last week after the US Fed anticipated three rate cuts in 2024 despite a tight labour market and better-than-expected CPI data. While the gold prices marked some gains, some upward momentum was dulled by persistent strength in the dollar, which is in sight of a one-month high. Similarly, the US 10-year yield is also holding steady around 4.2%, reversing well from the 4% mark.

Manav Modi, analyst, commodity and currency, MOFSL, said, “Gold prices gained, as investors awaited key U.S. inflation data later this week, which could provide more clues on the Federal Reserve’s policy path.”

Anticipation of key PCE price index data, which is the Fed’s preferred inflation gauge, and comments from top Fed officials later this week is triggering volatility in both dollar and bullion.

“Fed is expected to begin trimming rates from June, with the probability currently priced in at 70%. Today’s focus will be on the US and UK GDP data, which could provide some direction in the market,” said Modi.

Jateen Trivedi, VP Research Analyst, LKP Securities, said : “Gold prices in MCX were seen positive, taking support from Comex gold trading higher above $2192 testing $2200 resistance again and again every day. The participation in Gold has increased after FED’s policy and a dovish statement, which has triggered new buying momentum in Gold as broadly, Gold takes the support of $2150 and resistance of $2200. Once prices start trading above $2200, escalations towards $2250 cannot be ruled out.”

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