Category: Gold News

Gold price jumps 6% this month. Should you buy as MCX gold rate dips ₹1000 from record high?

Gold rate today: On account of three interest rate cuts in 2024 by the US Federal Reserve, gold price on the Multi Commodity Exchange (MCX) touched a new high of 66,943 per 10 gm last week. However, profit-boking soon triggered and the yellow metal price retraced more than 1,000 per gm and ended at 65,870 level on Friday. After ending below the 66,000 mark, the MCX gold rate logged a 5.30 percent rise in MTD time whereas spot gold price ascended to the tune of 6 percent in the international market.

According to commodity market experts, gold prices have retraced from recent highs due to the profit-booking. The yellow metal still possesses some steam and it may soon touch the 67,500 mark on MCX. In the international market, they predicted a $2,230 per ounce level for the precious yellow metal. Likewise, they predicted MCX silver rates to touch 78,000 per kg level whereas $28 per ounce in the international market.

US Fed rate cut in focus

Expecting a bounce back in gold prices, Shashank Pal, Chief Business Officer at PL Wealth Management said, “I believe gold prices will maintain their strength throughout 2024. The much-anticipated US Fed rate cuts are expected to inject further momentum into gold prices. This is because the US Fed rate cut means easy money, which means more inflation, and gold is supposed to be a hedge against inflation.”

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The PL Wealth Management expert went on to add that factors such as sluggish economic growth, geopolitical uncertainties, and upcoming elections in over 50 countries are likely to drive investors towards safer investment options, including gold.

Speaking on gold price retracement from a lifetime high, Anuj Gupta, Head of Commodity & Currency at HDFC Securities said, “Traditionally, gold prices witness correction after touching record highs as bullion traders or say jewelers book profit at higher levels. They do this to maintain the 1500 to 2,000 per 10 gm retail market premium. When the yellow metal ascended to a new peak of 66,943 per 10 gm level, retail bullion market premium in gold and silver diminished, which forced jewelers and bullion market traders to book profit in their respective gold and silver positions in the future market.”

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“I believe that demand for gold at the central banks across the world and soaring crude oil prices may limit this correction in gold and silver prices. Around 2,100 tons of physical gold have been bought by various central banks in the world in the last two years and this figure is expected to further rise in the short to medium term. So, one should maintain a buy-on-dips strategy in gold and silver maintaining stop loss at 64,500 and 72,000 levels respectively,” said Anuj Gupta adding, “In the international market, the silver rate today is in $23.80 to $28 per ounce range whereas gold rate today is in $2,140 to $2,230 per ounce range.”

Key trigger for gold rate today

Advising gold and silver investors to remain vigilant about the US dollar rates, Shashank Pal of PL Wealth Management said, “Immediate trigger will be how inflation is cooling in the United States as well as India. Since gold is dollar-denominated, the value of gold decreases if there is strength in the US dollar index. So investors need to watch what the dollar index is doing. Geopolitical influx, continued buying by central banks & governments, global as well as local demand-supply scenario is the other immediate triggers that can dictate gold prices in the near term.”

“The F&O trade volumes for gold globally too are significantly up vis a vis same period last year. It can be a good bet for the next 12-18 months horizon. Expect an 8-10% further upside from current levels in that period with intermittent volatility,” Pal concluded.

Disclaimer: The views and recommendations above are those of individual analysts, experts, and broking companies, not of Mint. We advise investors to check with certified experts before making any investment decisions.

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