Gold prices surge today as US recession fears ease, dollar rate drops

Gold prices witnessed strong early morning buying on Friday, with the Multi Commodity Exchange (MCX) gold rate opening at ₹70,303 per 10 gm and quickly reaching an intraday high of ₹70,398 per 10 gm.

This marks an impressive rise of over ₹250 per 10 gm from the previous close of ₹70,136. In the global market, COMEX gold is trading around $2,490 per troy ounce, while spot gold is at approximately $2,453 per ounce.

Triggers for gold rate today

Commodity market experts attribute the gold price surge to easing US recession fears following stronger-than-expected US job data. The positive employment figures have reduced concerns of an economic downturn and increased the likelihood of a US Federal Reserve rate cut in the upcoming September meeting.

The US dollar has also seen profit booking, with the dollar index slipping below the 103 mark, further supporting gold prices.

Anuj Gupta, Head of Commodity & Currency at HDFC Securities, noted that the bullish outlook for gold remains intact due to expectations of a global interest rate decline. However, he cautioned investors to monitor US dollar movements closely, as further dips in the dollar index could propel gold prices even higher.

"Gold price today is on an uptrend due to better-than-expected US job data released on Thursday. This positive US data has eased the US recession fear, and the market is now expecting a US Fed rate cut by around 25 bps in the upcoming US Fed meeting in September 2024," he said. 

Key levels to watch 

MCX gold is expected to trade between ₹69,000 and ₹71,000 per 10 gm. A decisive break above ₹71,000 could push prices to ₹72,000 or ₹73,500 in the near term.

In the international market, spot gold is likely to test resistance at $2,460 per ounce, with potential to reach $2,500 if this level is breached.

Gold costs more in Kerala 

Gold traded up by Rs 10 to Rs 6,565 per gram and by Rs 80 to Rs 52,520 per 8 grams today. This marks an impressive increase of over ₹250 per 10 gm from the previous close of ₹70,136.

18-carat gold, which is used to make lightweight jewellery, stone, and gem-encrusted jewellery, also rose by Rs 5 to Rs 5,425 per gram. The price of silver also increased to Rs 89 per gram today.

The price of one sovereign (8 grams) of gold is Rs 52,520. However, to purchase jewellery worth 8 grams, one has to spend a minimum of Rs 56,853, including labour charges and other taxes. As labour charges vary from shop to shop, the price also varies depending on the design of the jewellery.

          (By arrangement with livemint.com. With inputs from dhanamonline.com)