Gold prices fell in India on Friday, according to data from India's Multi Commodity Exchange (MCX).
Gold price stood at 70,906 Indian Rupees (INR) per 10 grams, down INR 384 compared with the INR 71,290 it cost on Thursday.
As for futures contracts, Gold prices decreased to INR 70,647 per 10 gms from INR 70,701 per 10 gms.
Prices for Silver futures contracts decreased to INR 81,119 per kg from INR 81,313 per kg.
| Major Indian city | Gold Price |
|---|---|
| Ahmedabad | 73,480 |
| Mumbai | 73,260 |
| New Delhi | 73,350 |
| Chennai | 73,420 |
| Kolkata | 73,435 |
Global Market Movers: Gold price traders seem non-committed as the focus remains glued to the US NFP
- Expectations that the Federal Reserve will keep interest rates higher for longer, along with the upbeat market mood, turn out to be key factors undermining demand for the safe haven Comex Gold price.
- The Fed signaled on Wednesday that the next move will be to lower the policy rate, though it was in no hurry to begin cutting borrowing costs as the disinflationary process has slowed in recent months.
- The Fed's less hawkish outlook led to the broad-based US Dollar weakness and helps limit the downside for the XAU/USD, warranting some caution before positioning for any meaningful downfall.
- Traders might also prefer to wait for the release of the closely watched US monthly employment details, or the NFP report, which is expected to show that the economy added 243K new jobs in April.
- Meanwhile, the Unemployment Rate is anticipated to remain steady at 3.8% during the reported month, while Average Hourly Earnings probably eased to the 4.0% YoY rate from 4.1% in March.
- The crucial jobs data might influence market expectations about the Fed's future policy decisions, which, in turn, will drive the USD and provide some meaningful impetus to the non-yielding metal.
(An automation tool was used in creating this post.)
Gold FAQs
Gold has played a key role in human’s history as it has been widely used as a store of value and medium of exchange. Currently, apart from its shine and usage for jewelry, the precious metal is widely seen as a safe-haven asset, meaning that it is considered a good investment during turbulent times. Gold is also widely seen as a hedge against inflation and against depreciating currencies as it doesn’t rely on any specific issuer or government.
Central banks are the biggest Gold holders. In their aim to support their currencies in turbulent times, central banks tend to diversify their reserves and buy Gold to improve the perceived strength of the economy and the currency. High Gold reserves can be a source of trust for a country’s solvency. Central banks added 1,136 tonnes of Gold worth around $70 billion to their reserves in 2022, according to data from the World Gold Council. This is the highest yearly purchase since records began. Central banks from emerging economies such as China, India and Turkey are quickly increasing their Gold reserves.
Gold has an inverse correlation with the US Dollar and US Treasuries, which are both major reserve and safe-haven assets. When the Dollar depreciates, Gold tends to rise, enabling investors and central banks to diversify their assets in turbulent times. Gold is also inversely correlated with risk assets. A rally in the stock market tends to weaken Gold price, while sell-offs in riskier markets tend to favor the precious metal.
The price can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can quickly make Gold price escalate due to its safe-haven status. As a yield-less asset, Gold tends to rise with lower interest rates, while higher cost of money usually weighs down on the yellow metal. Still, most moves depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAU/USD). A strong Dollar tends to keep the price of Gold controlled, whereas a weaker Dollar is likely to push Gold prices up.
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