Gold Prices: Chances of a rate cut at the start of the second half of 2024, have escalated buying sentiments among investors for haven gold. Another key support to this precious metal is from precariousness of the Gaza ceasefire. The prices of yellow metal have been broadly up since the start of this week and Tuesday is no different. In Dubai's souk market, both 24K and 22K prices surged as high as Rs 1,137 and Rs 1,705 in INR terms. However, 18K prices seem to continue to lose their shine. The cheapest gold to buy in rupees is below Rs 6,500.
Gold Prices In Dubai:
In Indian rupees...
Gold Prices In Dubai: 24k gold surged highest by Rs 1,136.62 to Rs 6,39,348.75 in 100 grams compared to Rs 6,38,212.13 of the previous day. Meanwhile,10 grams surged by Rs 113.66 to Rs 63,934.87 as against Rs 63,821.21 the previous day. While 8-gram gold picked up by Rs 90.93 to Rs 51,147.90 versus Rs 51,056.97 of the previous day. Lastly, 1 gram of gold edged up by Rs 11.37 to Rs 6,393.49 as against Rs 6,382.12 of the previous day.
In the case of 22K, prices were even higher than 24K. Notably, 22K of 100 grams soared by Rs 1,704.93 to Rs 5,92,179.02 from the previous day's price of Rs 5,90,474.09. 10 grams climbed by Rs 170.49 to Rs 59,217.90 compared to the previous day's price of Rs 59,047.41, while 8 grams jumped by Rs 136.39 to Rs 47,374.32 as against the Rs 47,237.93 of the previous day. Finally, 1 gram of gold inched up by Rs 17.05 to Rs 5,921.79 from the previous day's Rs 5,904.74.
The cheapest gold to buy in the current scenario is 24K and 22K's 1 gram which is below Rs 6,500.
The latest upside can be attributed to the surge in international prices with the dollar index softening against a basket of currencies. The rally was due to expectations of a rate cut in the September meeting. As per CME's FedWatch Tool, about 64% chance of a rate cut is most likely in September, which will aid non-yielding haven assets
Additionally, the ceasefire talks between Israel and Gaza have taken a setback, keeping the Middle East at a knives-edge. Hamas agreed to a ceasefire deal which was discussed between them, Qatar and Egypt as part of the ceasefire discussion.
However, Israeli officials unanimously voted to not accept the deal since it does not meet the country's basic requirements but they have decided to continue negotiations. Also, Israel has decided to continue on its mission in the Rafah border. This early morning fliers and other means of messages were sent out to Gaza civilians on the Rafah border to shift to another refugee camp near the coast, while signs of airstrikes in regions of Gaza have also been seen.
Hence, the geopolitical tensions in the oil hub, the Middle East, coupled with a sooner-than-expected rate cuts and softening in the dollar have played in favour of gold.
In Dirhams...
Prices of 22K surged by 0.75 dirhams to 75 dirhams on Tuesday, while 24K zoomed by 0.50 dirhams to 50 dirhams across grams. However, 18K witnessed a decline for the second consecutive day, in the range of 2.40 dirhams to 240 dirhams.
24K of 10 gram stood at AED2,812.50, while 100 gram is at AED28,125, 8 gram at AED2,250, and 1-gram at AED281.25.
Meanwhile, 22K of 10 grams is at AED 2,605, while 100 grams is at AED 26,050, 8 grams at AED 2,084 and 1 gram at AED 260.50.
Finally, 18K of 10 grams dipped to AED 2,131, and 100 grams plunged the most by AED 240 to AED 21,310. Also, 1 gram and 8 gram fell to AED 213.10 and AED1,704.80 respectively.
Yesterday, gold prices jumped by over 1%.
Rahul Kalantri, VP of Commodities, Mehta Equities said, "Gold and silver prices rebounded strongly on Monday, rallying nearly 1% in response to increasing optimism that the Fed might reduce interest rates sooner. Friday's US Nonfarm Payrolls report, indicating a slowdown in job creation, fuels expectations for a September rate cut."
Further, Kalantri cited a World Gold Council report, that showcased global central banks continued buying gold, adding 16MT in March, bringing total purchases to 290 tonnes in the first quarter of this year. The dollar index and U.S. 10-year bond yields also corrected post-US data, supporting precious metal prices.
However, a cooling down in geopolitical tensions could limit gains for precious metals, he said.
Going forward, Kalantri said, "Gold has support at $2298-2282 while resistance lies at $2340-2355. Silver has support at $27.10-26.95 with resistance at $27.48-27.61. In INR, gold finds support at Rs 71,120 and 70,880, with resistance at Rs 71,540 and 71,720. Silver has support at Rs 82,340-81,780, while resistance is at Rs 83,840 and 84,380."
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