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Business News/ Markets / Commodities/  Gold rate today at four week high. Should you buy as Middle East crisis boosts demand for yellow metal?
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Gold rate today at four week high. Should you buy as Middle East crisis boosts demand for yellow metal?

MCX gold rate today is facing hurdle at ₹63,200 per 10 gm level, say experts

Gold rate today has crucial support placed at 61,500 per 10 gm level, say experts. (Photo: Mint)Premium
Gold rate today has crucial support placed at 61,500 per 10 gm level, say experts. (Photo: Mint)

Gold rate today: Despite commitments in the US Fed meeting to maintain a high-interest rate regime, gold price finished more than 0.75 percent higher in the week gone by. Gold future contract on the Multi Commodity Exchange (MCX) for February 2024 expiry ended at 63,200 per 10 gm level, clocking 1,250 per 10 gm weekly gain against the previous Friday close of 61,950 per 10 gm. In the international market, gold price finished at the $2,039 per ounce level, logging a weekly gain of over $21 per ounce.

According to commodity market experts, Middle East tension helped the gold price to exhibit resilience despite the diminished hopes of an interest rate cut in March 2024. They said that the Red Sea crisis boosted the demand for gold as a safe haven but strong US job data strengthened the US dollar, which put breaks on the gold rush. They said that the MCX gold rate is facing resistance at the 63,200 level whereas it has crucial support placed at the 61,500 level.

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Triggers for gold price rally

On why gold price surged despite diminished hopes of an interest rate cut in March 2024, Anuj Gupta, Head — Commodity & Currency at HDFC Securities said, "The precious yellow metal displayed resilience despite US Fed meeting diminished hopes of an interest rate cut in March 2024. A major reason for this resilience can be attributed to the Red Sea crisis."

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"Geopolitical concerns in the Middle East played a significant role in boosting safe-haven demand for gold during the week. However, towards the end of the week, gold relinquished some of its gains due to a strengthening US dollar and rising treasury yields. The impetus for this shift was the release of a robust January jobs report, revealing an addition of 353,000 jobs, surpassing both December 2023's figures and the market's expectations of 187,000 jobs. Additionally, strong wage growth data hinted at persistent price pressures, clouding the outlook for potential rate cuts," said Sugandha Sachdeva, Founder of WealthWave Insights.

Also Read: SBI Q3 results 2024: Market estimates better set of numbers on lower slippages

Gold price outlook

On the outlook for gold price in the near term, Sugandha Sachdeva said, "Deciphering the price action, gold appears to have formed a base around 61,500 per 10 gm or $2,000 per ounce. Nonetheless, they are seen facing resistance at the 63,200 per 10 gm level. Sustained move past 63,200 per 10 gm level may pave the way for continued upward momentum, with the precious metal eyeing 63,800 per 10 gm or $2,080 per ounce level on the higher side."

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.

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ABOUT THE AUTHOR
Asit Manohar
Chief Content Producer at Live Mint Digital Team
Catch all the Commodity News and Updates on Live Mint. Download The Mint News App to get Daily Market Updates & Live Business News.
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Published: 03 Feb 2024, 11:31 AM IST
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