Gold prices rose on the Multi Commodity Exchange (MCX) on Monday, August 19, 2024. Gold futures, which expire on October 4, 2024, touched Rs 71,590 per 10 grams, up Rs 215 or 0.30%. The previous closing was Rs. 71,375.
Gold has continued its upward trajectory, rising more than 1% this week. This increase is due to a mix of safe-haven demand, fueled by growing geopolitical tensions in the Middle East, and predictions of a possible interest rate decrease by the US Federal Reserve in September.
Despite good US economic data, such as higher retail sales and dropping unemployment claims, which lifted the dollar and Treasury rates, the market's expectation of a moderate rate decrease helped gold keep its momentum.
The metal stayed close to its all-time high from July, maintaining its function as a hedge against economic and geopolitical uncertainty.
According to Prathamesh Mallya, DVP-Research, Non-Agri Commodities and Currencies at Angel One Ltd, "Gold is likely to remain stable, with support from ongoing geopolitical tensions balanced by stronger US economic data."
In contrast, spot gold fell 0.2% to $2,502.78 per ounce as of 0317 GMT, while U.S. gold futures rose 0.2% to $2,541.80. Rahul Kalantri, VP of Commodities at Mehta Equities, emphasized the influence of US retail sales data on gold prices.
He stated, "Gold and silver saw steady gains amid buoyant U.S. retail sales statistics. Retail sales in the United States increased by 1.0% in July, greatly above the predicted rise of 0.4% and recovering after a 0.2% decrease the previous month. Gold surpassed its main barrier of $2,500, reaching an all-time high in international markets."
Kalantri went on to say that encouraging Chinese retail sales statistics and a lower dollar index helped to drive up gold and silver prices.
"Escalating geopolitical tensions and strong demand prospects are supporting gold and silver prices," the economist said.
Gold reached an all-time high of $2,509.65 on Friday, fueled by expectations of a US Federal Reserve interest rate decrease in September. This, along with rising geopolitical tensions and robust central bank buying, has pushed gold prices up more than 20% this year.
Strong US retail sales and lower-than-expected jobless claims, together with benign inflation figures, have increased confidence in the US economy. Traders are now concentrating on the extent of the predicted rate decrease, with the CME FedWatch tool indicating a 75.5% likelihood of a 25 basis point cut.
Regarding price levels, Kalantri stated, "Gold has support at $2,482-2,465 and resistance at $2,518-2,534. "Silver has support at $28.74-28.55 and resistance at $29.18-29.34."
