Most recent article: India Gold price Wednesday: Gold drops, according to MCX data
Gold prices rose in India on Tuesday, according to data from India's Multi Commodity Exchange (MCX).
Gold price stood at 62,125 Indian Rupees (INR) per 10 grams, up INR 25 compared with the INR 62,100 it cost on Monday.
As for futures contracts, Gold prices increased to INR 62,323 per 10 gms from INR 62,095 per 10 gms.
Prices for Silver futures contracts decreased to INR 72,568 per kg from INR 72,427 per kg.
| Major Indian city | Gold Price |
|---|---|
| Ahmedabad | 64,210 |
| Mumbai | 64,075 |
| New Delhi | 64,185 |
| Chennai | 64,220 |
| Kolkata | 64,235 |
Global Market Movers: Comex Gold price sticks to modest gains despite bearish fundamental backdrop
- The New York Federal Reserve said in a report on Monday that US consumers' projection of inflation over the short run fell to the lowest level in nearly three years in December, which undermines the US Dollar and benefits the Comex Gold price.
- Inflation one year from now is expected to be at 3%, marking the lowest reading since January 2021, while inflation three years from now is seen at 2.6% and price pressures five years ahead were at 2.5% versus 2.7% in November.
- The data reaffirms expectations for an imminent shift in the Federal Reserve's policy stance, though investors continue scaling back their expectations for more aggressive policy easing in the wake of a still-resilient US economy.
- Atlanta Fed President Raphael Bostic noted that inflation has declined more than expected and that the US central bank still needs to give tight policy time to work on cooling off inflation. Bostic sees two 25 bps cuts by year-end 2024.
- Fed Governor Michelle Bowman said that the current policy stance appears sufficiently restrictive and that inflation could fall further with the policy rate held steady for some time, though the upside inflation risks remain.
- This raises uncertainty over the possibility of early interest rate cuts by the Fed, which assist the yield on the benchmark 10-year US government bond to hold steady above the 4.0% threshold and might cap the non-yielding yellow metal.
- The market focus, meanwhile, remains glued to the US consumer inflation figures on Thursday, which should help determine the next leg of a directional move for the Comex Gold price.
(An automation tool was used in creating this post.)
Gold FAQs
Why do people invest in Gold?
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.
Who buys the most Gold?
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.
How is Gold correlated with other assets?
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.
What does the price of Gold depend on?
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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