Gold Prices Surge in India: 24K Gold Hits Rs. 7,18,400 Amid Fed Rate Speculations
Today, gold prices in India made a significant recovery, surging after a notable drop. This reversal is of great importance, as both domestic and global markets have witnessed a decline in gold prices due to robust US economic data released last Friday. Investors are now eagerly anticipating the Federal Reserve’s announcement on key interest rates. This announcement is significant as it can influence the value of the US dollar, which in turn affects the price of gold. Other financial projections from the Federal Reserve, such as inflation forecasts and economic growth expectations, will also play a crucial role in determining the market’s future direction.
In terms of prices, 24K gold saw a notable increase. The cost for 100 grams rose by Rs.1,700, reaching Rs.7,18,400 from Rs.7,16,700 the previous day. For 10 grams, the price went up by Rs.170, reaching Rs.71,840 compared to Rs.71,670 yesterday. Similarly, the price for 8 grams increased by Rs.136 to Rs.57,472 from Rs.57,336, and 1 gram climbed by Rs.17, reaching Rs.7,184 from Rs.7,167. This increase in gold prices could potentially indicate a shift in investor sentiment towards safe-haven assets, which could lead to a decrease in the demand for riskier assets like stocks. It could also be a reaction to the recent drop in gold prices, with investors seeing it as a buying opportunity.
The 22K gold prices rose at the same rate. The cost for 100 grams increased from Rs.1,500 to Rs.6,58,500 from Rs.6,57,000. For 10 grams, the price went up by Rs.150 to Rs.65,850 from Rs.65,700. The cost for 8 grams rose by Rs.120 to Rs.52,680 from Rs.52,560, and 1 gram increased by Rs.15 to Rs.6,585 from Rs.6,570.
Similarly, 18K gold prices increased. The price for 100 grams increased by Rs.1,200 to Rs.5,38,800 from Rs.5,37,600. For 10 grams, the price increased by Rs.120 to Rs.53,880 from Rs.53,760. The price for 8 grams rose by Rs.96 to Rs.43,104 from Rs.43,008, and 1 gram climbed by Rs.12 to Rs.5,388 from Rs.5,376.
In addition to the Federal Reserve’s policy announcement, the Consumer Price Index (CPI) report for May is also due on Wednesday. The market is on edge, with experts anticipating that the central bank will likely keep interest rates steady. This anticipation is adding to the sense of uncertainty, with investors anxiously searching for hints about when the Fed might start cutting rates. Following the Fed’s June announcement, there will only be four rate-setting meetings left for the year, further adding to the need for constant monitoring and analysis.
Traders have had to adjust their expectations for rate cuts in September after the stronger-than-expected jobs data for May. The gold market, globally, experienced a sharp decline last Friday, marking its biggest one-day decrease since November 2020. This volatility underscores the need for constant monitoring and analysis. It’s crucial for investors to stay updated and adjust their strategies accordingly. According to the CME FedWatch tool, the chances of a quarter-point rate cut at the June 11-12 Fed meeting are currently only 2.2%.
As reported by investors.com, here are the market expectations for rate cuts in the upcoming Fed meetings:
- For the July 30-31 meeting, the likelihood of at least a quarter-point rate cut is 8.2%, down from 15.7% on May 31.
- On March 27, there was an 83.7% chance of a 25 basis point cut and a 35.4% chance for a 50 basis point cut.