Gold price dips ahead of US Fed meeting. Opportunity to buy in this correction?

Gold price dips ahead of US Fed meeting. Opportunity to buy in this correction?(Image: Religare Brooking)

MINT | June 11, 2024 | 09:03 PM IST | Daily Gold Prices | Follow on Google News

Gold price dips ahead of US Fed meeting. Opportunity to buy in this correction?

Gold price dips ahead of US Fed meeting. Opportunity to buy in this correction?

Gold rates today continue to remain under the sell-off heat as investors keenly anticipate the outcome of the highly influential US Fed meeting, which is commencing today. The gold futures contract on the Multi Commodity Exchange (MCX) for August 2024 expiry opened lower at ₹71,251 per 10 gm and touched an intraday low of ₹71,072 within a few minutes of the commodity market’s opening bell. In the international market, the COMEX gold price oscillates around $2,320 per troy ounce, whereas the spot gold price is around $2,303.

According to commodity market experts, gold prices today are under pressure after better-than-expected US job data, which dents the US Fed rate cut buzz. They said that positive US job data has triggered buying in the currency market, which fueled US dollar rates. However, the most significant blow to gold demand is the Chinese government’s decision to pause gold buying, reverberating across the globe. They said that gold prices are expected to remain in the $2,280 to $2,330 per ounce range, and any rise near the upper hurdle should be seen as a selling opportunity by investors.

US Fed meeting in focus

On reasons that are dragging the gold price today, Anuj Gupta, Head of Commodity & Currency at HDFC Securities, said, “Gold rates today are under pressure as investors are awaiting the outcome of the US Fed meeting beginning today. After the better-than-expected US job data, speculation for the US Fed rate cut has diminished. This has fueled US dollar rates, due to which the US dollar index regained the 105 mark.”

Kaynat Chainwala, AVP-Commodity Research at Kotak Securities, said, “The latest US jobs figures add leeway for the Fed to delay rate cuts. Markets have scaled back expectations for a Fed easing this year, with investors now pricing a 50% chance of a cut in September. Investors might be cautious ahead of the US CPI and FOMC meeting tomorrow. Fresh economic projections and dot plots will be closely watched.”

Gold rate today: Important levels to watch

Speaking on the outlook for gold prices in the near term, Anuj Gupta of HDFC Securities reiterated, “Till the outcome of the US Fed meeting becomes public on 12th June 2024, gold prices are expected to remain choppy due to the strong US dollar. So, it is advised to maintain a sell-on-rise strategy. In the international market, gold prices are expected to remain between $2,280 to $2,330 per ounce, whereas the MCX gold rate may remain at ₹70,500 to ₹71,800 per 10 gm.”

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.

MINT