Gold Prices Surge Amid Weak US Dollar and Inflation Data

Gold Prices Surge Amid Weak US Dollar and Inflation Data

VoM News Desk | November 15, 2023 | 11:47 AM IST | Breaking News | Follow on Google News

Gold Prices Surge Amid Weak US Dollar and Inflation Data

Gold Prices Surge Amid Weak US Dollar and Inflation Data

Gold prices experienced a significant uptick in early morning trades on Wednesday, driven by the US dollar index plunging to 10-week lows. This decline followed the release of soft US inflation data. The gold futures contract on the Multi Commodity Exchange (MCX) for December 2023 opened higher and quickly reached an intraday high of ₹60,224 per 10 grams. Concurrently, spot gold prices hovered around $1,965 per ounce.

Silver Market Trends

In line with gold, silver prices on MCX also saw an increase, opening at ₹71,794 per kg and hitting an intraday high of ₹71,795 per kg shortly after the market opened. The global market mirrored this trend, with silver prices around $23 per ounce.

Expert Insights on Gold Price Rally

Anuj Gupta, Head of Commodity & Currency at HDFC Securities, attributed the positive outlook for gold to the falling US dollar rate against major currencies. He noted that the US dollar index dipped close to 104 levels following the release of the US Consumer Price Index (CPI), which indicated a slowdown in underlying inflation in October. This data suggests a potential pause in the Federal Reserve’s interest rate hikes.

Investment Strategies and Price Support Levels

Amit Sajeja, Vice President of Research at Motilal Oswal, advised a ‘buy on dips’ strategy for gold investors. He highlighted that the ongoing Israel-Hamas conflict would likely prevent significant dips in gold prices. For spot gold, immediate support is seen at $1,935 per ounce, while MCX gold has support at around ₹58,300. On the higher side, gold faces a major hurdle at $1,980 per ounce and ₹60,300 per 10 grams on MCX.

Inflation and US Dollar Impact on Gold Prices

Sajeja added that inflationary pressures are likely to impact US dollar rates, which, in turn, supports the rally in gold prices. He projected that if MCX gold rates decisively breach the ₹60,300 level, the price could potentially escalate to ₹62,000 per gram. This outlook underscores gold’s role as a hedge against inflation and currency fluctuations.

VoM News Desk

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