Gold rate today: On account of US dollar hitting 15-month low and US CPI date hitting two years low, gold prices witnessed strong bounce back in the week gone by. Silver prices too ascended and witnessed huge buying interest among the bullion investors. Gold future contract for August expiry on Multi Commodity Exchange (MCX) finished ₹95 per 10 gm higher at ₹59,334 levels. In international market, yellow metal price ended around $1,955 per ounce levels.
Silver price on MCX ended at ₹75,990 per kg levels, logging intraday gain of ₹664 per 10 gm on Friday session. In international market, silver price ended at $24.920 levels.
US dollar in focus
On why gold and silver prices skyrocketed in the week gone by, Anuj Gupta, Vice President — Research at IIFL Securities said, “In the week gone by, US CPI data was released in which US inflation eased and hit two year lower levels. This sparked speculation about US Fed not raising interest rates in near term. So, US dollar started sliding downwards and the US dollar hit 15-month low during the sharp correction. Due to these combination of affairs, gold prices bounced back and hit three week high.”
Pause in US Fed rate hike buzz
On reasons for gold and silver price rally, Sugandha Sachdeva, Executive Director & Chief Strategist at Acme Investment Advisors said, “Gold prices got a nudge on the higher side as investors re-evaluate their expectations regarding interest rate hikes by the US Federal Reserve, coinciding with a sharp descent in the dollar index, which hit a 15-month low. The release of lower-than-anticipated US inflation data has raised hopes that the Fed might pause its interest rate hikes following the July meeting, where a rate hike looks almost sealed.”
Sugandha went on to add that in June, the US Consumer Price Index (CPI) rose by 3 percent year-on-year, falling short of the projected 3.1 percent and the previous reading of 4 percent. As inflationary pressures diminish, the possibility of two additional rate hikes by the US Fed is being reconsidered, leading to renewed interest in precious metals.
Gold, silver price outlook
“While gold experienced a modest rise, it was overshadowed by the remarkable surge in silver prices, which soared 8.44% in international markets due to the prevailing “risk-on” sentiments favoring the white metal. Gold, however, found strong support around $1893 per ounce in the last week of June and made its way toward a one-month high. The future outlook appears positive, particularly due to the weakness of the US dollar, which has pierced a significant support level at the 100.50 mark,” Sugandha added.
Acme Investment Advisors went on to add that there is a short-term resistance barrier for gold at the ₹59,550 per 10 gm or $1,970 per ounce mark that gold must convincingly surpass to maintain its upward trajectory. Similarly, silver rate today faces a near-term resistance at ₹76,500 per kg or $25.20 per ounce mark, and a breakout above this level could result in further upside potential, else a consolidation phase is likely.
Disclaimer: The views and recommendations given in this article are those of individual analysts. These do not represent the views of Mint. We advise investors to check with certified experts before taking any investment decisions.
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Updated: 15 Jul 2023, 02:09 PM IST