Gold rate today: A major aspect in the present market dynamics, the increase in US dollar rates has had a big impact on the price of gold today. Better-than-expected US job statistics was the main factor driving this increase in US dollar rates, which directly affected the price of gold. Furthermore, the selling streak has been further prolonged by China's halt in gold purchases. Within minutes of the commodities market's opening bell, the gold futures contract for the August 2024 expiry on the Multi Commodity Exchange (MCX) reached an intraday low of ₹70,927 after beginning with a downside gap at ₹71,149 per 10 gm. While COMEX is reporting $2,311 per troy ounce, spot gold prices on the foreign market are fluctuating at $2,295 per ounce.
Gold Price Correction Triggers
Praveen Singh, Associate VP of Fundamental Currencies and Commodities at Sharekhan by BNP Paribas, discussed the reasons why the gold rate is under pressure today. He noted, "Spot gold plummeted on Friday as China, a major player in the gold market, paused gold buying in May." The metal reached its highest level since May 22 as a result of this and the strong US nonfarm jobs data from May, which surprised observers who had been expecting a rate drop in July. This gave rise to anticipation of rate cuts following those of the Bank of Canada and the European Central Bank."
US Dollar Value Rises
"On Friday, the US Dollar Index increased by 0.70% to close at 104.93. For the week, it was up 0.25%. The US two-year yield increased by more than 3% on Friday, closing at 4.89%, while the US ten-year yield increased by 3.28% to 4.43%. In contrast to the forecast of 180K, US employers added 272K jobs in May, according to the nonfarm payroll report. The unemployment rate, at 4%, was higher than the previous figure of 3.90%, but average hourly earnings increased by 0.4% month over month and 4% year over year, exceeding the corresponding forecasts of 0.30% and 3.90%." stated Praveen Singh.
US Fed Rate Reduction in Focus
The decline in the price of gold was explained by Saish Sandeep Sawant Dessai, Analyst — Base Metal at Angel One, in relation to the US employment data. "A stronger-than-expected US jobs report, a significant event that has dampened hopes for interest rate cuts this year, is what caused the gold price to fall. Even if early gains were fueled by lower private payrolls data and predictions of a Federal Reserve rate decrease, the strong jobs report caused the currency to climb, increasing the price of gold for foreign purchasers," he added. The Angel One source went on to say that crucial US employment data and a stop to Chinese bullion purchases will probably push gold prices lower yet.
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