Gold price today: Due to growing expectations of a US Federal Reserve rate decrease and a decline in US dollar rates, the price of gold reached a six-week high of $2,391 per ounce on the international market. In the local market, the August 2024 gold futures contract on the Multi Commodity Exchange (MCX) reclaimed the psychological ₹73,000 barrier after posting a weekly gain of about 2 percent during the previous week. The gold rate on the MCX increased by ₹671 per 10 gm on Friday’s trading, ending at ₹73,038. Silver prices reached a four-week high on the international market, closing at $31.20 per ounce, following a decline in the value of the US dollar.
The highly anticipated US Fed rate decrease at the next US Fed meeting has damaged the US dollar rate in the forex market, according to analysts in the commodities market, which has led to an upswing in the gold rate today. Investors find gold more appealing when the US currency weakens following a US Federal Reserve rate drop. They said that the current surge in gold prices has been further supported by a lessening of US inflation worries following better-than-expected US job statistics and US core PCE index data showing the lowest annualized growth in more than three years.
Gold price rally triggers
Anuj Gupta, Head of Commodity & Currency at HDFC Securities, explained why gold prices are rising today: “International gold prices have climbed to a six-week high, whereas international silver rates have touched a four-week high.” This might occur as US inflation worries have lessened, which has increased talk of a US Fed rate cut. In the Forex market, the US dollar rate was under pressure due to growing expectations of a US Federal Reserve rate cut, and the US dollar index fell below the 105 threshold.
Gold prices increased by more than 2 percent last week as growing expectations of an early interest rate cut by the US Federal Reserve weakened the dollar index and acted as a catalyst for a strong recovery in gold prices, according to Sugandha Sachdeva, Founder of SS WealthStreet, pointing to other factors driving gold rates today. Recent statistics on the US core PCE index, a crucial indicator of inflation, showed the lowest annualized growth in three years. This suggested that economic price pressures were abating and raised the possibility that the US Federal Reserve will begin cutting interest rates at its September meeting.
According to the SS WealthStreet analyst, gold prices saw a further uptick at the conclusion of the week when the US economy unexpectedly added 206,000 jobs in June. But as wage growth slowed, unemployment increased to 4.1%, the highest level since November 2021. Additionally, the revised lower job gains for April and May suggest a cooling labor market and slower inflation, which further depresses the dollar index and encourages purchasing interest in gold denominated in dollars.
Current gold price: key levels to keep an eye on
Sugandha indicated that the price structure implies the precious metal has established strong support at approximately ₹70,700 and ₹72,200 per 10 grams. It is expected to maintain its upward momentum, potentially reaching ₹73,700 and ₹74,200 per 10 grams, or about $2,420 per ounce, in the near future.
Factors that could affect the price of gold
“Everyone’s attention is now on the US Consumer Price Index (CPI) data for June, scheduled for release next week,” Sugandha Sachdeva said, discussing the imminent factors that might determine the price of gold in the near future. This information will further impact the rate-cutting trajectory of the US central bank and, in turn, the price of gold. Should inflation really be dropping, this would strengthen the case for a rate decrease and probably lead to higher gold prices. The CPI data will be crucial in confirming this.
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