Gold price in India jumped sharply on Thursday. On the Multi-Commodity Exchange (MCX), gold price future climbed 0.22 per cent to Rs 52,356 for 10 grams on 1600 hours on August 11. Silver price, however, dropped on Thursday. The precious metal future declined 0.18 per cent to Rs 58,853 for a kilogram on August 11.
In the international market, gold price eased on Thursday. The United States Federal Reserve officials pointed towards further interest rate hikes even after inflation had slowed in July. Spot gold was down 0.3 per cent at $1,786.79 per ounce, as of 0712 GMT while US gold futures dipped 0.6 per cent to $1,802.10, Reuters reported. Benchmark US 10-year Treasury yields rebounded to 2.7910 per cent. The dollar was down 0.1 per cent, limiting the loss of yellow metal.
Inflation in the United States dropped to 8.5 per cent in July of 2022 from an over 40-year high of 9.1 per cent hit in June. It was also below market forecasts of 8.7 per cent. Additionally, core inflation was steady at 5.9 per cent beating expectations of 6.1 per cent, and offering some support that inflation has finally peaked.
Easing inflation should have reduced bets of an aggressive rate hikes by the US Federal Reserve and should have lifted prices. However, immediately after the data hawkish remarks from US Federal Reserve officials dampened hopes of a let-up in aggressive policy tightening after tame inflation data. Minneapolis Fed President Neel Kashkari and Chicago Fed President Charles Evans reaffirmed an aggressive path for interest rate hikes.
“MCX gold prices are expected to trade with a negative bias for the day amid optimistic sentiments in global markets. It is likely to get dragged down towards Rs 52,300 for the day. Further, silver prices are expected to take cues from gold prices and may move towards Rs 58,000 levels in coming sessions,” said ICICI Direct in a report. Additionally, investors will remain cautious ahead of initial jobless claims data from the US, it added.
Gold Price Future: Know What Analysts Say
“Domestic gold futures prices could start flat to weaker this Thursday morning, tracking overseas markets. A slightly stronger Rupee could also weigh on prices. Today’s range of MCX October gold contract is Rs 52,090-52,505. Today’s range of MCX September silver contract is Rs 58,450-59,415,” said Sriram Iyer, senior research analyst at Reliance Securities.
“COMEX gold trades modestly lower near $1800/oz as US dollar index recovered after yesterday’s sharp sell-off. The US dollar recovered as hawkish comments from Fed officials rekindled expectations that the central bank may continue with aggressive rate hikes. Easing price pressure globally has also reduced gold’s demand as an inflation. ETF flows also show weaker investor interest. Gold set fresh highs yesterday but failed to sustain and has now moved back to $1800/oz level which shows waning confidence. Fed’s tightening expectations may keep US dollar supported which may weigh on gold prices,” said Ravindra Rao, CMT, EPAT, VP, head commodity research at Kotak Securities.
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