Gold to retain its sheen in August, Silver likely to outperform this month
₹1,400 per 10 grams during the month. The rally was driven by multiple factors that came in support of the yellow metal in the international market. The primary reason being the increasing expectations that major global central banks, including the US Federal Reserve and the European Central Bank, may be nearing the end of their current monetary policy tightening cycles.
Additionally, a softer US dollar after slower-than-expected rise in US inflation also lifted appeal for the yellow metal. “A less aggressive tone by the US Fed is a big supportive trigger for gold. Weakness in the dollar index further added gains to gold prices.
Moreover, Chinese physical gold premiums have also reached a four-month high due to robust demand," said Ajay Kedia, Director, Kedia Advisory. The US Federal Reserve, on July 26, raised its benchmark fund rates by 25 basis points (bps) to 5.25-5.5%, as was widely expected by market participants. This brought the US interest rates to the highest level since 2001 to tackle sticky, high inflation.
Read here: US Fed raises rates by 25 bps to highest level since 2001 However, the statement by the Federal Open Market Committee (FOMC) suggested that the central bank may consider another pause at its next meeting in September. The US Fed also said it would assess a range of data points “in determining the extent of additional policy firming." As per the latest data, US consumer inflation in June, consumer inflation cooled to its lowest rate since 2021, as the consumer price index (CPI) rose 3.0% from a year ago, down from 4.0% in May. With easing inflation in the US, analysts expect that the Fed may be nearing the conclusion of its rate hiking cycle, which is driving positive sentiment in the prices of
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