In the realm of precious metals, gold and silver prices remained relatively stable, with the yellow metal trading just below the two-week highs. On the Multi Commodity Exchange (MCX), gold initiated the day at Rs 57,970 per 10 grams and witnessed an intraday low of Rs 57,931. Internationally, gold prices hovered around $1,873.51 per troy ounce. Similarly, silver started at Rs 69,365 per kg on the MCX, touching an intraday low of Rs 69,297, and was observed at approximately $21.94 per troy ounce in the global market.
Anuj Gupta, Head of Commodity and Currency at HDFC Securities, highlighted that gold prices concluded yesterday almost unchanged, marking a marginal 0.04% decrease and settling at 57,918 levels. The surge in the dollar index, currently trading at 106 levels, has influenced market dynamics. Nonetheless, the ongoing conflict between Israel and Hamas has intensified the demand for safe-haven assets, contributing to the support of bullions.
Spot gold concluded the day with a slight decline of 0.21%, reaching $1,869.76. Praveen Singh, Associate VP, Fundamental Currencies and Commodities at Sharekhan by BNP Paribas, mentioned that the metal retracted from its peak of $1,885 due to the hotter-than-expected US CPI inflation data for September. However, global gold ETF holdings saw an increase, indicating potential support levels at $1,858/$1,850 and resistance at $1,885.
Gold prices are currently hovering below their recent two-week highs, driven by optimistic US economic data, leading to speculations about prolonged high-interest rates, subsequently bolstering the dollar and bond yields from their recent lows.
Manav Modi, an Analyst specializing in Commodity and Currency at MOFSL, emphasized that the clashes between Israel and Hamas have heightened demand for safe-haven assets. The possibility of further escalation depends on reports concerning the involvement of other countries in the conflict.
The recent data revealing an increase in US consumer prices in September, primarily driven by a surprising surge in rental costs, prompted a rise in US Treasury yields and a strengthened dollar, leading to a downturn in global stock markets.
Modi further noted the remarks by Fed Bank of Boston President Susan Collins, highlighting that the latest inflation data underscores the uneven progress toward price stability, potentially leading the central bank to consider another rate hike to counter inflation. As market focus shifts to the Michigan Consumer Sentiment and Inflation Expectations, traders are advised to approach the market strategically, considering the potential for short-term rallies and fluctuations in the coming sessions.