Gold hits two-week high on US rate cut speculation; silver surges marginally
Akshaya Tritiya 2024: Gold price rises ₹41,000 in five years. Experts see up to ₹85K peak next year “Gold is driven higher by rise in festive demand in India with additional support from a weaker U.S. dollar, which is down on rising bets for an early rate cut by the U.S.
Federal Reserve. Safe-haven demand due to geo-political issues and mixed momentum in global equities too is seen supportive to the bullion," said Pranav Mer, VP - Research (Commodity & Currency) BlinkX and JM Financial. Gold continued its ascent following a 1% surge on Thursday, triggered by reports revealing a higher-than-anticipated increase in new claims for unemployment benefits among Americans last week.
Investors are eagerly awaiting the release of the U.S. producer price index and consumer price index data scheduled for next week, hoping for new insights into the Federal Reserve's potential interest rate adjustments. Traders are currently factoring in approximately a 68% likelihood of a Fed rate cut in September, as indicated by the CME FedWatch Tool.
Such rate reductions typically diminish the opportunity cost associated with holding non-yielding assets like gold. Regarding U.S. inflation, San Francisco Federal Reserve President Mary Daly remarked on Thursday that there is "considerable" uncertainty about its trajectory in the forthcoming months.
In other news, Palestinian residents reported Israeli forces bombarding the city of Rafah in the Gaza Strip on Thursday. Additionally, an Israeli official confirmed the cessation of indirect negotiations with Hamas. Back home, gold and silver prices made a significant rebound on Friday, after experiencing declines in two consecutive sessions.
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