Gold dips 1.36 pc this week over stable dollar, Fed rate hike expectation

Gold prices dipped 1.36% during the week as a stable dollar and stronger‑than‑expected US inflation data reinforced expectations that the US Federal Reserve may raise interest rates later this year. 

On Friday, MCX gold June futures dipped 0.59% while MCX silver May futures lost 0.94%. Currently, gold futures stand at ₹1,56,000, while silver futures at ₹2,67,000 per kg.

The price of 10 grams of 24-carat gold was at ₹1,56,463 on Friday down from ₹1,58,622 seen on Monday market opening, according to data published by the India Bullion and Jewellers Association (IBJA).

The dollar index rose about 0.10%, while US personal consumption expenditures (PCE) rose 3.8% (year‑on‑year) in April, the fastest pace since May 2023, bolstering expectations of US Fed rate hikes this year.

"Gold and silver continue to attract selective safe-haven and value-oriented buying near key technical levels, although upside momentum remains closely linked to expectations surrounding US monetary policy, bond yields and the trajectory of the US dollar," an analyst said.

Higher energy prices fuel inflationary pressure increasing the likelihood of Fed tightening, denting gold’s appeal as investors gravitate toward yield-bearing assets.

The recent US Fed’s ‌meeting minutes showed that more officials are now open to the possibility that they may need to hike rates.

COMEX Gold is currently trading in the $4,570–$4,600 range, with weekly price action continuing to reflect a consolidation phase and a cautious undertone, he added.

Technically, immediate resistance is placed in the $4,600–$4,650 region and the $4,400–$4,350 range continues to serve as a critical support area, market participants said.

For MCX Gold, immediate resistance is placed in the ₹1,60,000 to ₹1,62,000 range and the ₹1,54,000–₹1,52,000 region continues to act as a critical support base.

(This story was taken from syndicated feed and was only edited for style by Gujarat Samachar Digital team)