Gold continues to shine bright on strong demand, up 8% since November 2022
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Gold prices continued to surge on Thursday, poised to achieve their most substantial monthly increase in over a year. This surge was fueled by robust safe-haven demand, anticipation of U.S. interest rate cuts, and increased central bank purchases.
As of 10:20 a.m. EDT (1420 GMT), spot gold rose by 0.5% to reach $2,204.99 per ounce. This performance puts it on track for its most impressive month since November 2022, with gains of approximately 8% thus far, marking a second consecutive quarterly rise. Concurrently, U.S. gold futures saw a 0.7% uptick, reaching $2,204.80.
Gold surged to an all-time high recently following the U.S. Federal Reserve’s projection of three rate cuts in 2024. Presently, traders are factoring in a 64% probability of a rate cut in June, as per CME’s FedWatch tool.
Also read: Gold and silver prices Today on 28-03-2024: Check latest rates in your city
“Gold prices were trading higher amidst positive sentiment regarding interest rates, but the rise in the dollar index could exert pressure on gold. Strong resistance is observed around the 2200-2215$ range. In Comex, major support is identified at 2180$, while in MCX, it is at 66000. If Comex gold falls below 2180$, a sharp sell-off towards the 2140-2120$ range may occur, potentially bringing MCX Gold down to 65000 zones,” said Jateen Trivedi, VP Research Analyst, LKP Securities.
The upcoming release of the U.S. core personal consumption expenditure (PCE) price index report, scheduled for Friday, holds significance for investors as it provides insights into the Federal Reserve’s policy direction.
Nevertheless, Fed Governor Christopher Waller hinted on Wednesday that the current economic indicators might justify postponing or scaling back the anticipated interest rate cuts.
Also read: Gold price jumps 6% this month. Should you buy as MCX gold rate dips ₹1000 from record high?
“Gold prices have moved steadily higher over the last six months as expectations of a dovish Fed policy have been gaining ground. The fall in interest rates is a positive for gold prices. The gold prices breaking key long term resistance levels indicate there may be strong momentum which may continue over the near to medium term, some profit may not be ruled out though. The key monitorable remains the expectations building around the timing of Fed rate cut,” said Joseph Thomas, Head of Research, Emkay Wealth Management.
Meanwhile, Silver experienced a 0.2% decrease, settling at $24.60 per ounce, while platinum saw a 1.6% increase, reaching $907.80, and palladium surged by 3.1% to $1,014.17. Each of these metals was poised for monthly gains.
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Published: 28 Mar 2024, 09:14 PM IST
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