Most recent article: India Gold price Thursday: Gold falls, according to MCX data
Gold prices fell in India on Wednesday, according to data from India's Multi Commodity Exchange (MCX).
Gold price stood at 61,271 Indian Rupees (INR) per 10 grams, down INR 853 compared with the INR 62,124 it cost on Tuesday.
As for futures contracts, Gold prices decreased to INR 61,382 per 10 gms from INR 61,504 per 10 gms.
Prices for Silver futures contracts decreased to INR 69,281 per kg from INR 69,639 per kg.
| Major Indian city | Gold Price in INR |
|---|---|
| Ahmedabad | 64,295 |
| Mumbai | 64,160 |
| New Delhi | 64,305 |
| Chennai | 64,320 |
| Kolkata | 64,375 |
Global Market Movers: Comex Gold price continues to be weighed down by delayed Fed rate cut bets
- The US inflation data released on Tuesday tempered prospects of an early interest rate cut by the Federal Reserve and continues to undermine the non-yielding Gold price on Comex.
- The Bureau of Labor Statistics reported that the headline US CPI rose by 0.3% in January and softened to the 3.1% YoY rate from the 3.4% in December, beating expectations.
- Furthermore, the Core CPI, which excludes volatile food and energy prices, also surpassed consensus estimates and matched December's increase of 3.9%.
- Against the backdrop of the recent stronger US macro data, the still-too-high consumer inflation gives the Fed little reason to rush on cut interest rates.
- The CME Group's FedWatch Tool indicates just over a 35% chance of a rate cut in April and that the Fed will likely not cut rates until the June policy meeting.
- The expectations lift the yield on the benchmark 10-year US government bond to its highest level since December 1 and act as a tailwind for the US Dollar.
- Renewed concerns over higher for longer interest rates temper investors' appetite for riskier assets and assist the XAU/USD to defend the 100-day SMA support.
(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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