Gold Prices Open at ₹71,251, COMEX at $2,320

Gold Prices Open at ₹71,251, COMEX at $2,320

Key Points:

  • Gold Prices Fluctuations: Gold futures on MCX opened at ₹71,251 per 10 gm, with COMEX gold at $2,320 per ounce.
  • Future Outlook for Gold: Expected price range is $2,280 to $2,330 per ounce internationally, ₹70,500 to ₹71,800 per 10 gm domestically.
  • China Halts Gold Buying: China’s pause in gold buying disrupted global gold demand and increased market volatility.

On Tuesday, the US Federal Reserve began its much-anticipated meeting, casting a significant shadow over global financial markets. This meeting comes from better-than-expected US job data, which reported a robust increase in employment figures. The positive job data has triggered substantial activity in the currency market. As a result, US dollar rates have increased. Consequently, the US dollar index has regained the critical 105 mark.

China’s Gold Buying Pause Increases Market Volatility

Simultaneously, a significant development emerged from China as the government announced a pause in its gold-buying activities. This unexpected move has reverberated across the global gold market, making a noticeable impact on gold demand. China, one of the largest consumers of gold, plays a crucial role in the metal’s price stability. The Chinese government’s pause in gold buying increases volatility in an unstable gold market due to a strong US dollar.

Positive US Job Data Boosts Dollar, Hits 105 Mark

The recent US job data exceeded market expectations, providing further leeway for the Federal Reserve to delay any potential rate cuts. This development has significantly influenced market sentiment, with many investors now scaling back their expectations for a Fed easing this year. Kaynat Chainwala, Assistant Vice President of Commodity Research at Kotak Securities, explained that the recent US jobs data gives the Federal Reserve greater flexibility to postpone interest rate reductions. Consequently, market sentiment has shifted, with expectations for a Fed easing in the current year diminishing. Investors perceive a 50% likelihood of a rate cut occurring in September.

Gold Prices Fall from ₹71,251 to ₹71,072 on MCX

The volatility in gold prices has been notable. On India’s Multi Commodity Exchange (MCX), the gold futures contract for August 2024 commenced trading at ₹71,251 per 10 gm. It subsequently dipped to an intraday low of ₹71,072 per 10 gm. In the global market, the COMEX gold price was recorded at $2,320 per troy ounce, with the spot gold price at $2,303.

Future Gold Prices Expected to Between $2,280 and $2,330

Looking ahead, the outlook for gold prices remains uncertain. Experts expect gold prices to fluctuate between $2,280 and $2,330 per ounce in the international market. On the domestic front, the MCX gold rate may hover around ₹70,500 to ₹71,800 per 10 gm. The market is expected to remain volatile until clearer signals emerge from the US Federal Reserve regarding its monetary policy stance. Investors are advised to stay vigilant and consider a sell-on-rise strategy amid the prevailing market conditions.