Monday, July 15, 2024

Gold price reaches six-week high amidst growing confidence in Fed rate cut; eyes on US dollar rate

Gold Rates Surge on Rising Optimism for US Fed Rate Cut and Weak US Dollar

Gold prices are on the rise today, reaching a six-week high in the international market and crossing the psychological ₹73,000 mark in the domestic market. This surge is attributed to rising optimism for a US Fed rate cut and weakness in the US dollar rates. Experts believe that the anticipation of a US Fed rate cut has weakened the US dollar in the forex market, making gold more attractive to investors. Easing US inflation concerns and better-than-expected US job data have further fueled the gold price rally.

According to Anuj Gupta, Head of Commodity & Currency at HDFC Securities, the gold prices are in an uptrend due to the US Fed rate cut buzz, which has put pressure on the US dollar rate. Sugandha Sachdeva, Founder of SS WealthStreet, mentioned that the recent US core PCE index data showing the lowest annualized increase in over three years has increased the likelihood of a rate cut by the US central bank in September.

The surge in gold prices is also supported by the US economy adding 206,000 jobs in June, surpassing expectations. However, with unemployment rising and wage growth cooling, the market is anticipating a rate cut to address the weakening economic conditions.

Looking ahead, experts suggest that the US Consumer Price Index (CPI) data for June will be crucial in determining the future path of gold prices. If the data confirms a cooling inflation trend, it would bolster the case for a rate cut and likely support higher gold prices.

Investors are advised to consult with certified experts before making any investment decisions.

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