What is the story about?
Gold prices slipped on Monday after reaching a record high of Rs 1,07,807 in earlier sessions, as investors booked profits and negative sentiment in the
international markets weighed on the precious metal. On MCX, as of 10:00 am, the prices of gold October futures were down about 0.5 per cent or by Rs 542 to trade at Rs 1,07,186. While the grey metal (silver) also slipped about 0.7 per cent or Rs 907 to Rs 1,23,790. Despite the decline, analysts believe that the overall trend of both gold and silver remains strong. "Gold has delivered strong gains, but the trend in both gold and silver remains steady for now," Ravi Deora from Kuvarji Group told ET Now Swadesh.
Gold Prices in the International Market
However, on the international level, gold futures on Comex also followed the trend on the MCX, with gold futures down by 0.8 per cent or by USD 30.10 to trade at USD 3,623.20. While spot gold ticked lower to trade at 3,482.67.
On the USD side, the dollar index showed some strength, creating some downward pressure on the gold prices. A stronger US dollar makes purchases less attractive for foreign buyers.
Rate cut optimism capped further downside in the spot gold prices. According to Reuters, traders have fully priced in a 25-bp cut this month, with an 8 per cent chance of a jumbo 50-bp rate cut, according to the CME FedWatch tool.
Jigar Trivedi, Senior Research Analyst at Reliance Securities, told PTI that the US administration on Friday moved to exempt gold, along with some other metals, from its country-based tariffs, a step expected to lend further support to demand.
Lower interest rates reduce the opportunity cost of owning non-interest-bearing bullion and put downward pressure on the dollar, which in turn makes gold more affordable for investors using other currencies.
Analyst Take on Gold and Silver
Despite the decline in precious metals during the current session, the analyst has recommended a BUY call for both gold and silver.According to Ravi Deora, "While gold futures may see some volatility today, investors should focus on silver, which shows promising potential. A buy recommendation is at Rs 1,24,500 with a stop loss at Rs 1,24,400, and silver could reach levels around Rs 1,25,500 during the trading session."
City-wise gold rates
(Disclaimer: The above article is meant for informational purposes only, and should not be considered as any investment advice. ET NOW DIGITAL suggests its readers/audience to consult their financial advisors before making any money-related decisions.)
Do you find this article useful?
