Gold prices are set for their first weekly gain in three as investors anticipate rate cuts from the US Federal Reserve. As of 0321 GMT on Friday (June 7), spot gold held steady at $2,377.13 per ounce, reflecting a marginal change.
However, the precious metal has managed to secure a gain of about 2% throughout the week.
Meanwhile, US gold futures edged up by 0.2% to $2,396.00 per ounce.
In India, gold futures maturing on August 5, 2024 rose to ₹73,492 per 10 grams on the MCX.
The climb in gold prices comes amidst a backdrop of a weakening dollar and declining Treasury yields.
The dollar, hovering close to an eight-week low, coupled with a benchmark 10-year US Treasury yield falling to as low as 4.275% on Thursday, its lowest since April 1, has supported the appeal of gold among investors.
This decline in yields has made bullion more attractive, especially considering its status as a hedge against inflation, according to news agency Reuters report.
Investors are now eagerly awaiting the US non-farm payrolls data, scheduled for release at 1230 GMT.
Should this occur, it could strengthen the case for an earlier rate cut by the Federal Reserve, further buoying gold prices.
The possibility of the Fed initiating rate cuts as early as September gained traction this week following a string of weaker macroeconomic data, indicating a cooling inflation environment.
Lower interest rates diminish the opportunity cost of holding non-yielding assets like gold, consequently driving demand for the precious metal.
Despite a dip in physical demand, consultancy Metals Focus predicts that gold prices are poised to hit another record high this year.
Factors such as US rate cut expectations, central bank buying, and geopolitical tensions have underpinned the demand for gold, propelling it to a record high of $2,449.89 on May 20.
Rahul Kalantri, VP Commodities at Mehta Equities, also emphasised the influence of global interest rate expectations on the upward momentum of gold and silver prices.
He added that gold has established support levels at $2351-2335 per ounce, with resistance at $2391-2405 per ounce.
In the Indian rupee context, gold is supported at ₹72,880-₹72,650 per 10 grams, with resistance at ₹73,340-₹73,550 per 10 grams.
Click here to register for CNBC Awaaz's webinar, Commodity Gurukul
However, the precious metal has managed to secure a gain of about 2% throughout the week.
Meanwhile, US gold futures edged up by 0.2% to $2,396.00 per ounce.
In India, gold futures maturing on August 5, 2024 rose to ₹73,492 per 10 grams on the MCX.
The climb in gold prices comes amidst a backdrop of a weakening dollar and declining Treasury yields.
The dollar, hovering close to an eight-week low, coupled with a benchmark 10-year US Treasury yield falling to as low as 4.275% on Thursday, its lowest since April 1, has supported the appeal of gold among investors.
This decline in yields has made bullion more attractive, especially considering its status as a hedge against inflation, according to news agency Reuters report.
Investors are now eagerly awaiting the US non-farm payrolls data, scheduled for release at 1230 GMT.
There is speculation that job growth may fall below the 1,85,000 median forecast of economists.
Should this occur, it could strengthen the case for an earlier rate cut by the Federal Reserve, further buoying gold prices.
The possibility of the Fed initiating rate cuts as early as September gained traction this week following a string of weaker macroeconomic data, indicating a cooling inflation environment.
Lower interest rates diminish the opportunity cost of holding non-yielding assets like gold, consequently driving demand for the precious metal.
Despite a dip in physical demand, consultancy Metals Focus predicts that gold prices are poised to hit another record high this year.
Factors such as US rate cut expectations, central bank buying, and geopolitical tensions have underpinned the demand for gold, propelling it to a record high of $2,449.89 on May 20.
Rahul Kalantri, VP Commodities at Mehta Equities, also emphasised the influence of global interest rate expectations on the upward momentum of gold and silver prices.
He added that gold has established support levels at $2351-2335 per ounce, with resistance at $2391-2405 per ounce.
In the Indian rupee context, gold is supported at ₹72,880-₹72,650 per 10 grams, with resistance at ₹73,340-₹73,550 per 10 grams.
Click here to register for CNBC Awaaz's webinar, Commodity Gurukul
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