Gold Prices In Bangalore: 24-22K Yellow Metal Prices Jump By Rs 300-Rs 3,000; Akshaya Tritiya In Focus

Gold rates in Bangalore have been rising sharply since last month. The 24-carat gold rate in Bangalore has reached ₹72,380 for 10 grams. There is an increase of around 1.2% in gold prices in Bangalore, showing a positive outlook for demand of gold in the coming future. Gold prices are also surging on apprehension that US Federal Reserve will cut interest rates in second half of this year. Other substantial factors like increased tension between Israel and Palestine along with the fear of high inflation amidst soft position of the Dollar in global market are also affecting the price of gold in the global market.

Gold Prices In Bangalore:

In 22K, gold prices in Banaglore surged by as high as Rs 3,000 in 100 gram to Rs 6,63,500 versus Rs 6,60,500 of the previous day. Meanwhile, gold prices in 10-gram jumped by Rs 300 to Rs 66,350 in a single-day. 1-gram and 8-gram is up by Rs 30 and Rs 240 from the previous day.

Further, in 24K, gold prices jumped at a higher scale by Rs 3,300 to Rs 7,23,800 as against Rs 7,20,500 of the previous day.10-gram is up by Rs 330 to Rs 72,380, while 1-gram and 8-gram surged by Rs 33 and Rs 264 in a day.

Though gold is considered as a safe haven against rising inflation, if interest rates are cut it automatically lowers the opportunity cost of holding bullion and thus exerting a downward pressure on the dollar since gold is denominated in dollars.

The latest rally in gold is due to expectations of rate cut in early of second half of current year, as non-yielding assets take support from lower interest rates. Apart from this, the ceasefire talks between Israel and Hamas continues to be uncertain.

It needs to be noted that US Federal Reserve has stayed on its target of three rate cuts in 2024, even though no specific timeframe has been mentioned by the Fed Bank Of New York president, John Williams. But the consensus is that Fed rates may see a downward trends in September.

COMEX Gold prices rose almost 1% on Monday, amid a weak greenback and treasury yields following disappointing jobs data last week. The April Jobs data showed weak job additions, higher unemployment rate and ease in average hourly earnings. This came after Fed chair Jerome Powell's dovish comments at the May FOMC policy meeting, hinting at potential rate reductions later this year. Markets now show a 64% chance of a rate cut in September, according to CME's FedWatch Tool, aiding the demand for non-yielding bullions, said- Kaynat Chainwala, Senior Manager - Commodity Research, Kotak Securities.

Gold has always acted as a crisis commodity, it has always reached its new high amid the geopolitical situations and economic uncertainties. Similarly, the latest developments of geo-political tensions in middle east pushed gold prices up by over 500 rupees in the MCX, reaching 71,200. Other precious metals like silver and platinum also saw some gains: spot silver rose by 2.4% to $27.2 per ounce, platinum edged up by about 1.9% to $970.2. Concerns over the Gaza ceasefire potentially failing has fueled the rise in bullion prices. Investors are now closely watching the developments in the Middle East conflict, as Hamas agreed to a ceasefire proposal, but Israel refused stating that it is not meeting the terms of demand and hence, continued strikes in Rafah, expressing dissatisfaction.

The correlation between gold prices and economic factors like interest rates, inflation, and geopolitical tensions highlights its status as a safe haven asset. The spike in Gold prices in Bangalore has seen a drive due to multiple factors, including expectations of interest rate cuts by the US Federal Reserve, geopolitical tensions in the Middle East, and concerns about inflation amid a weaker dollar. But one must take a mental note that there is always a limited impact on the price of any asset by global powers, multiple domestic factors like interest rate, inflation also play a key role and must be looked upon for.

This week, gold demand is likely to spike Bangalore due to the celebration of Akshaya Tritiya on May 10 across India. Popularly known as Akha Teej, Akshaya Tritiya is the third tithi of the bright half of the month of Vaisakha.