Gold Rates Updates : On Wednesday, gold prices on the Multi Commodity Exchange (MCX) traded higher, closely following the international bullion market, which is hovering near record levels. The rally in gold is driven by growing optimism over a potential interest rate cut by the US Federal Reserve. Silver prices also saw a significant rise, reaching a four-week high, boosted by a weakening US dollar and strong demand from China.
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Gold Rates Updates : MCX Gold and Silver Prices on the Rise
MCX gold was trading 0.28% higher at ₹71,979 per 10 grams, while MCX silver climbed 0.21% to ₹84,912 per kilogram. Internationally, gold prices edged closer to their record highs, spurred by Western fund inflows and expectations of a US interest rate cut. Spot gold rose by 0.1% to $2,517.38 per ounce, following an all-time high of $2,531.60 reached on Tuesday. US gold futures increased by 0.2% to $2,555.20. So far this year, gold prices have surged by approximately $460, or 22%.
Impact of a Weakening Dollar and Falling Treasury Yields
The weakening of the dollar to its lowest level this year against the euro, coupled with declining benchmark 10-year Treasury yields, has made gold more attractive for investors holding other currencies. The bullish trend in gold is further supported by geopolitical uncertainties and substantial global ETF inflows.
Rate Cut Expectations and Market Outlook
Jigar Trivedi, Senior Research Analyst for Currencies & Commodities at Reliance Securities, expects the US Federal Reserve to implement a 25 basis points (bps) rate cut at its September meeting. This follows strong retail sales data from July, although the upcoming jobs data could still influence the decision. There is currently a divided opinion on whether the cut will be 25 or 50 bps. Trivedi added that MCX Gold October futures have appreciated for the last four sessions, with resistance anticipated at ₹72,500 per 10 grams. He recommends a bullish stance, advising investors to buy on every dip.
Key Events to Watch
Investors are now awaiting the minutes of the Federal Reserve’s latest meeting, which will provide more clarity on the potential rate cuts. Additionally, Fed Chair Jerome Powell’s upcoming speech at the Jackson Hole Symposium on Friday is expected to offer further insights into the US economic outlook.
Market Sentiment and Predictions
Traders have largely priced in a rate cut at the Fed’s September meeting, with a 68% probability of a 25 bps cut, according to the CME FedWatch tool. Rahul Kalantri, VP Commodities at Mehta Equities Ltd, noted that the ongoing volatility in gold and silver prices is driven by the weakening dollar and the crisis in China’s real estate sector, making these metals attractive investment options. Strong demand for gold in China continues to support high prices.
Support and Resistance Levels for Gold and Silver
According to Kalantri, gold’s support levels are at $2,502 and $2,485, with resistance at $2,532 and $2,550. For silver, support is found at $29.22 and $28.96, while resistance is at $29.74 and $29.98.
On the MCX, gold has support at ₹71,510 and ₹71,320, with resistance at ₹71,980 and ₹72,220. Silver’s support levels are at ₹84,250 and ₹83,780, with resistance at ₹85,400 and ₹85,950.
Why are gold prices on the rise?
Gold prices are rising due to optimism over a potential interest rate cut by the US Federal Reserve and increased demand from China.
What is the current price of gold on the MCX?
As of Wednesday, MCX gold was trading at ₹71,979 per 10 grams
How has silver performed in recent trading?
- MCX silver prices have climbed 0.21%, reaching ₹84,912 per kilogram.
What factors are influencing international gold prices?
International gold prices are influenced by Western fund inflows, US rate-cut expectations, and a weakening US dollar.
What are the key support and resistance levels for gold?
Gold has support at $2,502 and $2,485, with resistance at $2,532 and $2,550. On the MCX, support is at ₹71,510 and ₹71,320, with resistance at ₹71,980 and ₹72,220.
Why is the dollar’s performance important for gold prices?
A weaker dollar makes gold more attractive to investors holding other currencies, as it reduces the relative cost of gold.
What is the market expecting from the US Federal Reserve?
The market expects a 25 basis points rate cut at the Federal Reserve’s September meeting, though there is some debate about the exact size of the cut.
How has gold performed this year?
Gold prices have gained about $460, or 22%, so far this year.
What role is China playing in the gold market?
Strong demand from China, particularly in the face of its ongoing real estate crisis, is helping to sustain high gold prices.
Should investors buy gold now or wait?
Analysts suggest maintaining a bullish stance on gold, recommending investors buy on dips, especially as the market awaits further signals from the Federal Reserve.