Gold Surges Past ₹58000 Mark on Dovish US Fed Signals

Gold Surges Past ₹58000 Mark on Dovish US Fed Signals

VoM News Desk | October 12, 2023 | 11:27 AM IST | Breaking News | Follow on Google News

Gold Surges Past ₹58000 Mark on Dovish US Fed Signals

Gold Surges Past ₹58000 Mark on Dovish US Fed Signals

In a significant turn of events, gold prices today saw a substantial boost, surpassing the ₹58,000 per 10-gram mark on the Multi Commodity Exchange (MCX). This remarkable rally was primarily driven by the dovish stance revealed by US Federal Reserve officials in the recently released minutes of the US Fed’s meeting.

Fluctuating Gold Prices: A Rollercoaster Ride

The day began with MCX gold prices opening at ₹58,045 per 10 grams and surging to an intraday high of ₹58,075 within minutes of the market’s opening. However, profit booking activities soon triggered a downturn, and the precious metal reached an intraday low of ₹58,001 per 10 grams within just 20 minutes of trading. In the international market, the price of gold is currently hovering around $1,873 per ounce.

Meanwhile, silver also had its share of volatility. It opened the day at ₹69,734 per kilogram on MCX but quickly came under selling pressure. Silver prices dropped to an intraday low of ₹69,660 per 10 grams. In the global market, the price of silver remains above $22 per ounce.

Factors Behind the Gold Rally

Sugandha Sachdeva, Executive Director and Chief Strategist at Acme Investment Advisors, shed light on the factors contributing to the surge in gold prices. She mentioned, “Gold’s outlook has recently brightened, driven by dovish signals from the US Fed officials hinting at the possibility of a rate pause during the Fed’s upcoming meeting in November. This has spurred a rally in the precious metal, with gold prices climbing in the past four consecutive trading sessions. The decline in the US dollar and treasury yields has further fueled this upward momentum.”

Sachdeva also highlighted that simmering geopolitical tensions in the Middle East have rekindled gold’s appeal as a safe haven asset. Investors, seeking refuge amid uncertainty, are increasingly drawn to the allure of gold.

Currency Market Cues and Shifting Demands

Anuj Gupta, Head of Commodity & Currency at HDFC Securities, added further insights into the support for gold prices. He mentioned, “Due to geopolitical tensions, there’s been an increased demand for safe-haven assets like gold. The Dollar Index is also correcting from an overbought zone, signaling support for gold prices. The dollar index is currently trading at 105.40 levels.”

Gupta also noted that fund houses and central banks are shifting their demand from the US dollar to gold.

Rupee’s Prospects and Upcoming Data

Looking ahead, Anuj Choudhary, Research Analyst at Sharekhan by BNP Paribas, shared his perspective on the Rupee’s performance. He expects the Rupee to trade with a slight positive bias, influenced by global market risk appetite and the softening of the US Dollar, which has been impacted by dovish comments from US Federal Reserve officials. However, ongoing geopolitical uncertainties related to the conflict between Hamas and Israel may limit sharp upside movements.

VoM News Desk

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