Gold prices experienced a decline on Monday (June 10), influenced by various global economic factors and market movements. On the Multi Commodity Exchange (MCX), gold contracts for August delivery traded lower by ₹345 or 0.48% to ₹71,008 per 10 grams with a business turnover of 15,759 lots.
Analysts attribute this fall to weak global cues and recent economic developments.
Globally, gold was trading 0.47% lower at ₹2,314 per ounce in New York.
This decline follows a dramatic 3.5% drop on Friday, marking the biggest one-day decrease since November 2020.
The drop was triggered by a stronger-than-expected US jobs report and the announcement from China's central bank that it paused gold purchases for its reserves in May after 18 consecutive months of buying, according to news agency Reuters.
The recent robust US jobs data has also impacted market expectations regarding Federal Reserve policy.
Bets on the Federal Reserve cutting interest rates in September have decreased from around 70% to approximately 50%.
The Federal Reserve is not anticipated to make any changes during its upcoming policy meeting, but investors will closely watch comments from Fed Chair Jerome Powell and updates to economic projections from policymakers.
Additionally, US inflation data, due on Wednesday (June 12), will be a critical indicator for future market movements.
"Unless the dot plot pricing starts to be very less dovish, meaning the Fed does not expect any cut being pencilled in this year at all, you could drastically see a tremendous sell-off in gold because that could push US 10-year Treasury yields higher," Wong was quoted in the Reuters report.
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Analysts attribute this fall to weak global cues and recent economic developments.
Globally, gold was trading 0.47% lower at ₹2,314 per ounce in New York.
This decline follows a dramatic 3.5% drop on Friday, marking the biggest one-day decrease since November 2020.
The drop was triggered by a stronger-than-expected US jobs report and the announcement from China's central bank that it paused gold purchases for its reserves in May after 18 consecutive months of buying, according to news agency Reuters.
Kelvin Wong, a senior market analyst for Asia Pacific at OANDA, noted, "The medium-term bullish trend that was in picture since last week or so has now a chance of being damaged from a technical perspective."
The recent robust US jobs data has also impacted market expectations regarding Federal Reserve policy.
Bets on the Federal Reserve cutting interest rates in September have decreased from around 70% to approximately 50%.
The Federal Reserve is not anticipated to make any changes during its upcoming policy meeting, but investors will closely watch comments from Fed Chair Jerome Powell and updates to economic projections from policymakers.
Additionally, US inflation data, due on Wednesday (June 12), will be a critical indicator for future market movements.
"Unless the dot plot pricing starts to be very less dovish, meaning the Fed does not expect any cut being pencilled in this year at all, you could drastically see a tremendous sell-off in gold because that could push US 10-year Treasury yields higher," Wong was quoted in the Reuters report.
Click here to register for CNBC Awaaz's webinar, Commodity Gurukul
First Published: Jun 10, 2024 3:44 PM IST
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