Gold rate today: Due to dwindling prospects of a US Fed rate hike, gold price surged to a new high of 61,914 per 10 gramme levels on the Multi Commodity Exchange (MCX) last week. However, profit booking occurred at higher levels, and the MCX gold rate concluded the week at 60,745 per 10 gm, a 1.62 percent weekly gain. Last week, the silver price on the MCX concluded at 73,161 per kg, representing a significant 4.53 percent weekly rise.
According to commodity market experts, gold and silver prices gained traction following weak US CPI data and Moody's recent move to lower the US credit rating from stable to negative, which acted as a catalyst for profit booking in the currency and bond markets. This resulted in a dramatic decrease in the US dollar index and US treasury yields as investors began to transfer money away from the currency and bond markets and towards alternative assets such as gold.
However, commodity market specialists claim that gold is currently facing a barrier around 62,000 levels, while silver is currently encountering opposition at 73,500 per kg levels. Further gains in gold and silver prices can be predicted only after these barriers are decisively breached.
What caused the gold price to skyrocket?
According to market expert Sugandha Sachdeva, "gold prices surged to a new record of 61,914 per 10gm this week, marking a weekly gain of 1.62 percent, while silver experienced a significant increase of 4.53 percent." The rise in both precious metals was spurred by dwindling prospects of more rate hikes by the US Federal Reserve.
Following a correction that saw gold prices fall to approximately 59,500 per 10gm at the start of the week, the yellow metal drew strong purchasing activity. Meanwhile, silver prices found support at $69,000 per kg, resulting in an excellent rising trend."
Anuj Gupta, Head of Commodity & Currency at HDFC Securities, stated, "After soft US inflation data, sharp correction was witnessed in US dollar and US treasury yields." The US dollar index has fallen below 104, while the US treasury rate has approached 4%. This stimulated interest in purchasing bullions.”
He predicted that the US dollar index would approach 100 points if it broke through its present support level of 103 points. Anuj Gupta, when asked about the MCX issue that caused a sudden surge in gold prices on Thursday, said that a technical chart shows that 733 lots of MCX gold were exchanged around 61,914 levels.
"During the week, the significant corrective wave observed in the dollar index acted as a catalyst in boosting the entire bullion complex." Moody's recent decision to downgrade the US credit rating outlook from stable to negative underlined the economic uncertainties that could cloud the US economy's outlook, contributing to precious metals' safe-haven appeal. In addition, the US Consumer Price Index (CPI) fell to 3.2% on an annual basis in October, down from 3.7% in September. Jobless claims increased for the fourth week in a row, and industrial production figures for October fell short of expectations. A softer-than-expected inflation print and a cooling labour market, fuelled optimism that the US central bank may have concluded its rate-hiking program," said Sugandha Sachdeva.
