Today, on April 12, 2024, gold and silver prices experienced a significant surge on the Multi Commodity Exchange (MCX), reflecting a complex interplay of geopolitical tensions and economic indicators.
Gold commenced trading on the MCX at Rs 72,510 per 10 grams, witnessing a slight dip to an intraday low of Rs 71,999. Simultaneously, the international market saw gold prices hovering around $2,386.02 per ounce. Silver, on the other hand, opened at Rs 83,239 per kg on the MCX, with an intraday low of Rs 83,238. In the global market, silver prices were noted around $28.76 per ounce.
Kaynat Chainwala, Senior Manager of Commodity Research at Kotak Securities, provided insight into the market dynamics, stating, “COMEX Gold prices rebounded from early losses and closed higher, despite the persistent strength of the dollar and US benchmark treasury yields. This resilience can be attributed to investors weighing geopolitical risks alongside mixed inflation data.”
Highlighting the sentiment surrounding the Federal Reserve’s stance, Chainwala emphasized, “The minutes of the March FOMC meeting indicate that the Federal Reserve is cautious about adjusting its target range until there is more certainty regarding sustainable inflation trends.”
In a notable development, COMEX Gold futures surged to a new record high, surpassing $2400 per troy ounce amidst escalating tensions in the Middle East. The United States’ Consumer Price Index rose by 3.5% year-on-year, exceeding expectations, while the Producer Price Index grew by 2.1%, slightly below the anticipated 2.2%, as per a Kotak Securities Research Report.
The CME Fed watch tool suggests that the market is currently assessing a 41% probability of a rate cut in July. Meanwhile, geopolitical tensions in the Middle East, particularly between Israel and Iran, have heightened concerns, with Israel preparing for a potential direct attack from Iran.
Silver prices mirrored the upward trajectory of gold, surging by over 2% in early Asian trading and reaching the highest levels since February 2021. This rally is attributed to early signs of demand recovery from China and positive Manufacturing PMIs from the US and Europe. Furthermore, the prospect of geopolitical escalation continues to bolster bullion prices, despite the prevailing strength of yields and the dollar.
The market outlook remains dynamic, with investors closely monitoring geopolitical developments and economic indicators for further cues on the trajectory of precious metal prices.