Most recent article: India Gold price today: Gold keeps the red, according to MCX data
Gold prices fell in India on Tuesday, according to data from India's Multi Commodity Exchange (MCX).
Gold price stood at 61,120 Indian Rupees (INR) per 10 grams, down INR 259 compared with the INR 61,379 it cost on Monday.
As for futures contracts, Gold prices increased to INR 61,262 per 10 gms from INR 61,117 per 10 gms.
Prices for Silver futures contracts decreased to INR 72,068 per kg from INR 71,864 per kg.
| Major Indian city | Gold Price |
|---|---|
| Ahmedabad | 63,260 |
| Mumbai | 63,090 |
| New Delhi | 63,150 |
| Chennai | 63,220 |
| Kolkata | 63,270 |
Global Market Movers: Comex Gold price is underpinned by a softer US Dollar and geopolitical risks
- A US defense official stated on Tuesday that Iran-backed Houthi rebels in Yemen fired a land-based cruise missile, which, in turn, is seen lending some support to the safe-haven Comex Gold price.
- The upbeat US employment figures released on Friday made traders bet that it could take the Federal Reserve until May to begin a series of interest-rate cuts next year and act as a headwind.
- A New York Fed survey on Monday showed that consumers anticipate inflation to be at 3.4% a year from now, down from 3.6% in October and marking the lowest reading since April 2021.
- The incoming data raised hopes that inflation could continue to decelerate without the economy falling into a recession and forced investors to trim their bets for the first Fed rate cut move in March 2024.
- Market participants, however, seem convinced that the US central bank is done with its policy-tightening campaign and may begin easing its monetary policy by the first half of the next year.
- According to CME group's FedWatch Tool, investors are still pricing in over a 40% chance of a March cut of at least 25 basis points (bps) and a nearly 75% chance of such a move in May 2024.
- This, in turn, fails to assist the US Dollar to capitalize on the post-NFP positive move and lends support to the non-yielding metal, though bulls seem reluctant ahead of the US consumer inflation data.
- The headline CPI is expected to rise by 0.1% in November and the yearly pace ticked down to 3.1%. The core gauge is anticipated to edge up from 0.2% to 0.3% MoM and hold steady at a 4.0% YoY rate.
- The market attention will then shift to the outcome of the highly-anticipated two-day FOMC monetary policy meeting, scheduled to be announced during the US session on Wednesday.
(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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