June 6, 2024
New Delhi, India
Gold Prices Analysis
Gold prices surged today, driven by a drop in the US dollar and Treasury yields. The gold futures contract for August 2024 on the Multi Commodity Exchange (MCX) opened higher at ₹72,879 per 10 gm and quickly hit an intraday high of ₹72,958. In the international market, spot gold hovered around $2,368 per ounce, while Comex gold traded at approximately $2,387 per troy ounce.
Factors Driving Gold Prices Higher
- Weaker US Dollar and Treasury Yields:
- The US dollar slipped to a two-month low, making gold more attractive to investors.
- US Treasury yields also declined, with the 10-year yield falling to 4.28% and the 2-year yield to 4.731%.
- Fed Rate Cut Expectations:
- Growing expectations of a Federal Reserve rate cut amid signs of an economic slowdown supported gold prices.
- The Bank of Canada recently cut its benchmark rate, and the European Central Bank is expected to follow suit.
- Geopolitical Tensions:
- Ongoing conflicts in the Middle East continue to drive demand for safe-haven assets like gold.
Market Reactions and Economic Data
- Gold’s Recent Performance: Gold prices have been climbing for the second consecutive day, reaching a two-week high around $2,375 during the European session.
- US Economic Indicators:
- The Automatic Data Processing (ADP) report showed a smaller-than-expected rise in private sector employment in May.
- The Institute for Supply Management (ISM) Services PMI increased to 53.8, exceeding expectations.
- Softer US Personal Consumption Expenditures (PCE) Price Index data pointed to easing inflation, further supporting gold prices.
Looking Ahead
Traders are now focusing on upcoming US job data, with the Weekly Initial Jobless Claims report due soon and the Nonfarm Payrolls (NFP) report expected on Friday. These data points are critical as they will influence market expectations regarding the Federal Reserve’s next moves on interest rates.
Disclaimer:
CurrencyVeda provides this news article for informational purposes only. We do not offer investment advice or recommendations. Before making any investment decisions, please conduct thorough research, consult with financial experts, and carefully consider your financial situation, risk tolerance, and investment goals. Investing in the stock market carries risks, and it’s essential to make informed choices based on your individual circumstances. CurrencyVeda is not liable for any actions taken based on the information provided in this article.
