Daily SumUp

Gold prices surged to a new peak, soaring to ₹65,298 per 10 grams on the MCX, indicating a notable increase of over ₹2,700 within the initial week of March last week on Thursday. This remarkable uptrend in the value of the precious metal is primarily attributed to the anticipation of an interest rate cut by the US Federal Reserve in June. 

This expectation has ignited bullish sentiments in both domestic and international markets, further fueling the rise in gold prices.

Chair Jerome Powell's indication of the Central Bank's possible rate reduction in the coming months boosted market confidence, resulting in gold reaching a fresh high of $2,152 in international markets on Wednesday.

Also read: Gold and silver prices Today on 08-03-2024 : Check latest rates in your city

International gold prices ended February 0.25% lower at $2032.8 per ounce, whereas, domestic prices closed 0.67% lower.

On the other hand, MCX Silver witnessed a downtrend following its positive closure on Wednesday last week. By around 9:30 am, it was observed trading at ₹74,015 per kg, reflecting a decrease of ₹123 or 0.17%. However, despite this short-term setback, silver futures have depicted a significant rise of almost ₹2,859 or 4.01% in March. On a year-to-date basis, they have experienced a marginal decline of 0.39% or ₹292, according to analysis provided by the commodity and currency expert.

The surge in gold prices can be attributed to the decline in the dollar index (DXY), which has once again dipped below the 104 mark. Presently, it stands at 103.80 against a basket of six major currencies, showing a degree of stability. Over the past five trading sessions, the dollar index has experienced a 0.17% depreciation.

Also read: Gold rate today hits new high as US Fed testimony pulls down US dollar index to 5-week low

“Despite this unwinding of rate cut expectations, gold is showing relative resilience. Geopolitical tensions in the Middle East and global growth concerns are acting as tailwinds. While the US economy has managed to weather high borrowing costs and tight credit conditions thanks to US fiscal spending and consumers running down their savings, the support from these factors is expected to wane in 2024, dragging down growth. Rising credit card and auto delinquencies in the US signal weakness ahead. US inflation too is slowly but steadily progressing towards the Fed’s 2% target, which too should support rate cuts. Additionally, the rapidly increasing interest costs on the $34 trillion US national debt too is expected to weigh on policymakers’ decision making, prompting them to cut rates,” said Chirag Mehta, Chief Investment Officer, Quantum AMC.

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Sources: AFP | VOA | BBC | Reuters | NY Times | Yahoo News

Genre: Current Affairs | Geo-Politics | Politics | Gold | Inflation | Price-Hike | Poverty