Gold prices rise today but silver rates drop1 min read . Updated: 31 Jul 2019, 05:32 PM IST
- Both gold and silver prices are sharply higher this year
- Gold may be poised for a breakout year, say some analysts
Gold prices were higher today in Indian markets, reflecting the same global trend. On MCX, August gold contracts were 0.31% higher at ₹34,637 while October contracts rose 0.08% to ₹35,431. Some profit-taking was seen in silver prices, with September contracts on MCX falling 0.70% to ₹41,287. In global markets, gold was steady at $1,430.74 per ounce, on track for a third straight month of gains.
Expectations for an interest rate cut by the US Fed and other major central banks have lifted gold prices by over 12% so far this year. The US Federal Reserve is widely expected to lower interest rate by 25 basis points later tonight, which would be its first since the financial crisis more than a decade ago.
But what analysts will focus more is on the communication, whether the Fed leaves the door open for more rate cuts later this year. Fed chief Jerome Powell will address the media shortly after the policy announcement.
Some analysts say that if the Fed surprises either with 50 bps rate cut or a more dovish tone than expected, gold prices could get a near-term boost.
Gold prices have also drawn support from Brexit uncertainties and a lack of progress between the US and China in trade negotiations.
In global markets, silver slipped 0.7% to $16.46 per ounce on profit-taking but is on track for a second straight month of gains.
Holdings in bullion-backed ETFs expanded 4.8 tons to 2,350.1 tons, the highest since April 2013, according to data compiled by Bloomberg, while silver options showed a spike. (With Agency Inputs)