Gold prices on the MCX hovered at Rs 71,251 per 10 grams on Tuesday, hitting an intraday low of Rs 71,004. In the international market, prices maintained a similar trend, hovering around $2302.15 per ounce. This indicates a certain level of stability in the gold market.
In the silver market, the price on the MCX hovered at Rs 89,100 per kg and hit an intraday low of Rs 88,161. In the international market, the price hovered around $29.15 per ounce.
Fall in both gold and silver continues after a start of the week, on the back of higher dollar and further delay in rate cut expectations. Kaynat Chainwala, AVP-Commodity Research at Kotak Securities, noted, “COMEX gold prices rebounded slightly on Monday following the significant drop of more than 3.5% on Friday, influenced by the positive Labour report.
The data revealed that the US economy added 272,000 jobs in May, a substantial increase from the revised 165,000 in April and well above the expected 185,000. This robust US jobs report has given the Fed room to postpone rate cuts.”
Market expectations for a Fed easing this year have been revised, with investors now estimating a 50% chance of a cut in September. Chainwala said, “Investors are advised to be cautious ahead of the US CPI and FOMC meeting tomorrow. The market will be closely monitoring the fresh economic projections and dot plot.”
Manav Modi, Senior Manager Analyst, Commodity Research, MOFSL, said, “Updates regarding China putting a halt in their 18-month long gold buying has also weighed on the sentiment; however, any updates regarding buying gold lower levels by China could once again cushion the prices. Market participants are cautious ahead of the US CPI and Fed policy meeting scheduled later this week. Gold on the domestic front is expected to be between the range of Rs 70,700 -71,800.”
Additionally, Jateen Trivedi, VP Research Analyst – Commodity and Currency, LKP Securities, says, “The current gold price movement was mainly influenced by the strengthening US dollar, which rose from $104 to $104.90 following strong Nonfarm payroll data. Additionally, profit booking occurred due to indications that China might halt its gold purchases, suggesting that gold prices could be capped for a while. Market focus now shifts to the upcoming US policy decision and CPI data, both due on June 12.”