Most recent article: India Gold price Wednesday: Gold falls, 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 62,324 Indian Rupees (INR) per 10 grams, up INR 181 compared with the INR 62,143 it cost on Monday.
As for futures contracts, Gold prices increased to INR 62,124 per 10 gms from INR 62,010 per 10 gms.
Prices for Silver futures contracts decreased to INR 71,090 per kg from INR 71,638 per kg.
| Major Indian city | Gold Price |
|---|---|
| Ahmedabad | 64,435 |
| Mumbai | 64,245 |
| New Delhi | 64,320 |
| Chennai | 64,430 |
| Kolkata | 64,445 |
Global Market Movers: Comex Gold price benefits from geopolitical tensions and a softer US Dollar
- The risk of a further escalation of conflicts in the Middle East, along with China's economic woes, assists the safe-haven Comex Gold price to regain some positive traction on Tuesday.
- The US and UK have conducted a fresh series of joint air strikes against the Iran-backed Houthis in Yemen, who have been targeting commercial vessels passing through the Red Sea.
- Pakistan and Iran have decided to resolve their issues with diplomacy, while the Israel-Hamas conflict is threatening to erupt into a large-scale war and impact the global economy.
- Investors continue to scale back their expectations for a more aggressive policy easing by the Federal Reserve in the wake of signs that the economy is still in good shape.
- The current market pricing indicates a 40% chance of a March rate cut, down from as much as 80% a week ago, and five 25 bps rate reductions for 2024 as compared to six two weeks ago.
- The yield on the benchmark 10-year US government bond holds just below the highest level since December touched last week and should acts as a tailwind for the US Dollar, capping the XAU/USD.
- The Bank of Japan, as was widely expected, decided to maintain the status quo and leave its ultra-loose monetary policy settings unchanged at the end of the January meeting this Tuesday.
- Traders now look to the European Central Bank (ECB) meeting, which, along with the global PMIs, the Advance US Q4 GDP and the US Core PCE Price Index, for a fresh directional impetus.
(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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