Gold Prices In Bangalore, May 15: 24K Prices Jump By Rs 4,300 After Falling For 3-Days; Latest Prices

Gold rates in Bangalore saw a spike and rebounded after the US PPI data was released on tuesday. The gold prices in Bangalore were witnessing a down trend amidst the global market fluctuations. The price was supported by a pullback in dollar and treasury yields as the data revealed the US producer price rose more than the expected rate in April and thus indicating high inflation.

Gold prices in Bangalore: 24K gold jumped by Rs.4,300 for 100 grams reaching Rs.7,32,500 from Rs.7,28,200 on previous day. 10 grams went up by Rs.430, reaching Rs.73,250 compared to Rs.72,820 yesterday. While 8 grams increased by Rs.344 reaching Rs.58,600 in contrast to RS.58,256 yesterday. Lastly, 1 gram gold spiked by Rs.43 reaching 7,325 from Rs.7,282 the previous day.

The 22K gold climbed by the same rate. 100 grams went up by Rs.4,000 thus reaching Rs.6,71,500 against Rs.6,67,500. Similarly, 10 grams increased by Rs.400 touching the mark of Rs.67,150 in contrast to Rs.66,750 the previous day. The 8 grams of gold increased by Rs.320 reaching Rs.53,720 compared to previous day's closing of Rs. 53,400. Lastly, 1 gram of gold climbed by Rs.40 to Rs.6,715 against Rs.6,675 the last day.

In the case of 18K, 100 grams went up by Rs.3,200 reaching Rs.5,49,400 compared to Rs.5,46,200 the previous day. Whereas, 10 grams of gold increased by Rs.320 reaching Rs.54,940 in contrast to Rs.54,620 the previous day. 8 grams of gold went up by Rs.256 reaching Rs.43,952 against Rs.43,696 the previous day. Lastly, 1 gram of gold increased by Rs.32 reaching Rs. 5,494 against Rs.5,462 in the previous day closing.

Kaynat Chainwala - Senior Manager, Commodities Research - Kotak Securities said, "COMEX Gold prices gained almost 1% on Tuesday, after the US producer prices data showed that core and headline prices were both ahead of expectations in April, but there were significant downward revisions to March, tempering concerns about sticky prices."

Chainwala added, "Meanwhile, Fed Chair Powell reiterated that inflation is decreasing more slowly than anticipated, which will keep the central bank on hold for a prolonged period. Geo-political tensions also remained high in middle-east and Europe. Markets are now prepared for the latest US CPI report that is expected to show that core consumer prices moderated in April."

The uptick in the gold prices last week was supported by the release of US employment data. The producer price in the US surged beyond the expected rate in both service and the goods cost. The US consumer price index (CPI) is anticipated to increase by 3.4% year over year in April, slightly lower than the 3.5% annual increase in march.

However, high inflation might delay the anticipated rate cuts by the Fed. The Fed's strategy of not cutting the interest rates till the inflation reached a certain target leaves the gold market in fluctuations. In such a scenario, gold's appeal as a hedge against currency's devaluation enhances, while the opportunity cost of holding non-yielding assets diminishes. Moreover, the overall market sentiment remains buoyant, with equity markets near highs, this could temporarily dampen gold's appeal as a safe haven.

The gold prices in Bangalore are impacted by multiple global and domestic factors. Due to the recent reports by the Fed the gold market is seeing slight turbulence. Alongside, the geopolitical tensions in the middle east is also playing a key role in determining the gold rates in Bangalore. The investors are now focusing on the CPI report that might provide more clarity on Fed rate cuts this year.