Gold rate today saw a notable upsurge in the domestic futures market. This is said to be due to the geopolitical developments and healthy demand from the domestic spot markets. Having said that, rise in US dollar and treasury yields have capped gains for gold.
According to a Reuters report, the benchmark 10-year treasury yield has also jumped to a 12-week peak. Also, the dollar has increased to its highest level since August 2. Furthermore, around 9:20 am, even the MCX Gold for December 5 expiry traded 0.21 percent higher at INR 78,200 per 10 grams.
In the previous session, MCX Gold witnessed an upsurge to a record high of Rs 78,460 per 10 grams, wherein, silver also saw its all-time high of INR 98,598 per kilogram. If we look at the international markets, gold prices has remained steady after showcasing a record high of USD 2,740.37 in the previous session.
Rahul Kalantri, VP of commodities at Mehta Equities stated, "Gold prices soared to record highs, and silver surged to fresh 12-year peaks on Monday, following the Chinese central bank’s decision to reduce its one-year and five-year prime loan rates by 25 basis points. This move bolstered demand for safe-haven metals. However, the prices later eased from their peaks due to gains in the dollar index and rising US 10-year bond yields."
The gold price today has been supported strongly by the today’s ongoing tensions in West Asia, stable dollar index, interest rate cuts which is further expected to showcase rate cuts by the US Fed, and uncertainty surrounding the US election 2024 outcome have supported gold prices.
Experts are positive about gold's medium-term prospects due to expectations of more rate cuts and a decline in the US dollar and bond yields.
"Gold initially rallied after Russian President Vladimir Putin, during the BRICS summit, proposed a new payment system for BRICS nations to counter the US dollar's dominance in global foreign exchange reserves. Gold stands to benefit from potential de-dollarization efforts by BRICS and other nations. Silver, a fellow precious metal, has mirrored gold’s rally. However, strengthening dollar and US bond yields could cap further gains," highlighted Kalantri.
