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Gold prices surge on weak dollar and US rate cut speculation


Gold prices experienced strong buying in the early morning session today. After opening lower on the Multi Commodity Exchange (MCX), gold prices touched an intraday high of ₹72,320 per 10 grams. In the international market, COMEX gold prices oscillated around $2,358 per troy ounce, continuing the recent upward trend. Similarly, silver prices rebounded strongly after retracing from their lifetime high of ₹96,220 per kg.

Factors driving gold prices

Commodity market experts attribute the rise in gold and silver prices to the weakening US dollar. They also point to upcoming US GDP and core PCE data releases on Thursday, which are expected to be flat, a development seen as positive for the bullion market.

Head of Commodity & Currency at HDFC Securities, stated, “Gold and silver prices are appreciating due to the weak US dollar. The US dollar index has fallen below the 105 mark, supporting lower prices of gold and silver. Additionally, the market anticipates flat US GDP data on Thursday, which could spark speculation about a potential US Fed rate cut. The core PCE data is also expected to be flat on Thursday.”

Senior Manager of Commodity Research at Kotak Securities, highlighted the speculation of a US Fed rate cut, saying, “Federal Reserve Bank of Minneapolis President Neel Kashkari indicated that the US central bank’s policy stance is restrictive but did not rule out further interest-rate increases. The focus is now on the PCE price index data, expected to rise 0.2% month-over-month in April, the smallest advance this year. This has sparked a ‘US Fed rate cut buzz,’ indicating the market’s anticipation of a potential interest rate cut by the Federal Reserve, which could impact gold and silver prices.”

Key levels for gold prices

HDFC Securities outlined important levels for the gold price today: “The MCX gold rate today has support at ₹71,600, with resistance at ₹72,900 per 10 grams. In the international market, the spot gold price today has support at $2,340 per ounce and faces a hurdle at $2,370. If this resistance is breached, the spot gold price may soon reach the $2,400 per troy ounce mark.”

The weakening US dollar and potential US Fed rate cuts are crucial factors driving the current surge in gold and silver prices. Keep an eye on the market as these developments unfold.

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