Most recent article: India Gold price Tuesday: Gold extends advance, according to MCX data
Gold prices rose in India on Monday, according to data from India's Multi Commodity Exchange (MCX).
Gold price stood at 62,178 Indian Rupees (INR) per 10 grams, up INR 112 compared with the INR 62,066 it cost on Friday.
As for futures contracts, Gold prices increased to INR 62,615 per 10 gms from INR 62,362 per 10 gms.
Prices for Silver futures contracts decreased to INR 72,777 per kg from INR 72,480 per kg.
| Major Indian city | Gold Price |
|---|---|
| Ahmedabad | 64,710 |
| Mumbai | 64,485 |
| New Delhi | 64,580 |
| Chennai | 64,690 |
| Kolkata | 64,640 |
Global Market Movers: Comex Gold price extends gains on renewed Fed cut bets
- Comex Gold price shows stabilization above the crucial support of $2,050, supported by persistent rate cut expectations and a potential spillover of the Middle East crisis.
- Investors’ confidence that the Federal Reserve (Fed) will reduce interest rates from March has increased after the release of the softer-than-projected United States PPI report for December.
- The annual PPI grew 1.0%, slower than the 1.3% anticipated by investors. The core PPI decelerated to 1.8% against the consensus of 1.9% and the prior reading of 2.0%.
- Producers cut prices of goods and services at factory gates amid the decline in gasoline and food prices, which indicates a soft outlook for consumer price inflation and increasing odds that interest rates decline from March.
- As per the CME Fedwatch Tool, chances in favor of a 25-basis-points (bps) interest rate cut to 5.00%-5.25% in March jumped to 70% from 62% after the PPI report.
- Fed policymakers continue to reiterate the need to maintain interest rates in a restrictive trajectory to ensure that underlying inflation will return to 2% in a timely manner.
- The next trigger for Gold price will be the monthly US Retail Sales data for December and the Fed’s Beige Book, which will be released on Wednesday.
- Investors expect the US monthly Retail Sales to have grown by 0.4% against a 0.3% jump in November. Retail sales excluding automobiles are seen growing steadily by 0.2%.
- On the global front, fears of a widening Israel-Hamas war have escalated after the airstrikes from the US and the UK on Houthis..
- Deepening Middle East tensions have improved demand for non-yielding assets.
- Meanwhile, the US Dollar Index (DXY) is stuck in a tight range around 102.50 amid lower trading volume as US markets are closed on account of Martin Luther King Birthday. The 10-year US Treasury yields have rebounded to near 3.98%.
(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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