After a modest rise earlier in the week, gold prices rose for the third consecutive day despite weak Indian demand. The development comes after the release of weak US jobs data, making the Federal Reserve less likely to raise interest rates this year to tackle inflation.
Despite prices bouncing back from three-month lows, demand in India remains stable. According to news agency Reuters, gold prices in the country rose to 148,046 rupees per 10 grams ($1,553) after touching the lowest level of 140,450 rupees since March 27 on Tuesday, according to news agency Reuters.
China, on the other hand, saw a slight increase in buying interest.
Less chances of Fed increasing rates
US hiring increased in June, according to data released Thursday, showing that the labor market continues to struggle despite positive signs over the past few months. That could prevent the Fed from raising rates at its next meeting in July, which has been a headwind for non-yielding bullion.
Oil, a key determinant of inflation, is now showing signs of stabilizing as tankers begin flowing through the Strait of Hormuz and the US-Iran work on turning their 60-day pause in hostilities into an agreement for peace in the Middle East through a memorandum of understanding.
“Low energy prices and slower job growth suggest that inflation pressures are likely to ease in the coming months,” Bart Melek, global head of commodity strategy at TD Securities, said in a note, according to new agency Bloomberg.
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He said reduced expectations of a Fed hike have prompted traders to cover previously established short-gold positions, while also reducing the incentive to liquidate long positions, which likely explains gold’s rally over the past few days. “We believe gold is only likely to head towards resistance at $4,280 an ounce.”
International spot gold was on course for its first weekly gain in five and traded above the $4,100 slab as US jobs data showed little chance of a rate hike.
Indian and Chinese markets
Volatility in international prices led to gold prices falling 8.4% in June, the first monthly decline since March. Premiums of up to $5 an ounce were quoted by dealers this week at a $7 discount to official domestic prices, including 15% import and 3% sales charges, compared with last week’s premium of up to $6.
“Many buyers were waiting for a price correction. Once prices came down, they started making small purchases at the beginning of the week,” a Kolkata-based jeweler told Reuters. A Mumbai-based bullion dealer with a private bank later said, “Jewelers were buying, but volatile prices made them cautious. The season of low demand has started now, as there are no major festivals anytime soon.”
Meanwhile, silver prices rose 1.76 percent ₹₹ 2.37 lakh per kg in futures trade on Friday amid a strong global trend, according to news agency PTI. The white metal for July delivery rose on the Multi Commodity Exchange. ₹4,096, or 1.76 percent, ₹₹2,37,400 per kg in a turnover of 1,593 lots.
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China, on the other hand, traded at a $2 per ounce discount to the global benchmark spot price, compared with a $3-$7 discount offered last week.
“$4,000 seems to be a very good support at the moment, and I think the market will stay here for quite some time. However, there is still a lot of uncertainty, which is why people are hesitant to buy too much at the moment,” Peter Fung, head of dealing at Wing Fung Precious Metals, told Reuters. “If prices drop below $4,000, we could see some more buying interest on dips.”
current market prices
As per HT report, the current prices of 24k gold in different cities of India are as follows:
Delhi: 147,689
Mumbai: 147,804.66
Lucknow: 148,784.83
Chennai: 149,179.64
Bengaluru: 147,849
Ahmedabad: 149,065.62
Hyderabad: 148,033.48
Indore: 148,624.43
Pune: 147,722
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As per HT report, the current prices of 10 grams of silver in various Indian cities are as follows:
Delhi: 2,336.1
Mumbai: 2,337.82
Lucknow: 2,354.16
Chennai: 2,357.05
Bengaluru: 2,336.03
Ahmedabad: 2,356.11
Hyderabad: 2,339.76
Indore: 2,349.55
Pune: 2,335.54
In the foreign market, Comex silver futures increased by 2.17 percent to $ 62.23 an ounce.
