Gold rates in India witnessed a volatile week from July 7th to 11th. On Saturday, gold prices surged sharply with 24 carat of 10 grams nearing the Rs 1 lakh mark. MCX gold is also nearing Rs 98,000 levels, while Spot Gold is holding above $3,330 per ounce. However, the upward momentum in yellow metal is expected to continue due to two factors. Firstly is the direction of US rates and secondly, the expectation of a decline in the dollar. Both factors will be heavily swayed by US tariffs and trade uncertainties, which is key support for gold.
24 carat gold prices surged by Rs 7,100 in 100 grams to Rs 9,97,100, while 10 grams of gold is higher by Rs 710 to Rs 99,710 on Saturday. 22 carat gold prices also climbed by Rs 6,500 to Rs 9,14,000 in 100 grams, and rose by Rs 650 in 10 grams to Rs 91,400.
Also, 18 carat gold prices surged by Rs 5,400 to Rs 7,47,900 in 100 grams, and were up by Rs 540 to Rs 74,790 in 10 grams.
Gold Prices Weekly Performance:
100 grams of gold surged by Rs 7,100 on July 12 in 24 carat, followed by an upside of Rs 6,000 on July 11 and an upside of Rs 2,200 on July 10. However, gold prices had fallen by Rs 6,600 on July 9, and by Rs 5,400 on July 7. On July 8, the gold price was down by Rs 5,400.
This week, gold started on a volatile note, but gained momentum in the second half. Now, gold prices are up by 1.33% in July so far across carats.
MCX Gold, Silver Prices:
MCX Gold ended at Rs 97,830 per 10 grams on July 11th, up by Rs 12 or 0.01%. Surprisingly, MCX silver touched a new all-time high of Rs 1,13,111 per 1kg, rising by Rs 3,988 or 3.65%.
Spot Gold:
Gold rose to around $3,330 per ounce on Friday, gaining for a third straight session, supported by safe-haven demand amid escalating trade tensions. President Donald Trump announced a 35% tariff on Canadian imports starting August 1 and signalled plans for 15-20% blanket tariffs on most other trade partners, as per Trading Economics.
Gold Price Outlook Near Term:
"Gold prices in international markets are in a consolidation phase and such consolidation almost always prepares a launch pad for the yellow metal to move in an upward trend. Earlier in the year the demand for gold from China was often highlighted as a factor that was supporting higher gold prices," said experts at Emkay Wealth Management.
After the reported selling by China towards the end of April and beginning of May, this factor has become superfluous in the bigger picture. Over the last two weeks, a stable dollar and firming US bond yields have placed downward pressure on gold prices.
Going ahead, Emkay Wealth Management has cited that the current focus of the markets is on two factors.
The first is the direction of US interest rates. With the Fed on hold as it is still unclear about the likely impact of the tariffs on the US retail prices, one of the major triggers for gold is absent. However, given the economic conditions and the relatively lower inflation numbers, the likelihood of the Fed going in for a rate cut or two before the end of this calendar year is very high.
The second trigger is a byproduct of the first one, and it is an anticipated decline in the US Dollar against other currency majors. This can happen only with a sustained fall in the US Dollar yields and interest rates. The Dollar index is at 97.00 and this marks a fall of close to 10 % over the last six months, and a fall of about 10 % since the beginning of this calendar year.
Emkay's note added, "This has been already priced in the gold prices in the international markets, but what we need to see is a further fall in the Dollar caused by official rate cuts and a fall in market yields."
"There is a strong view that with the new budgeted spends to the tune of US$ 4.60 trillion, the situation could become murkier because the resultant borrowings may put upward pressure on the yields," it added.
Also, Aksha Kamboj, Vice President, India Bullion and Jewellers Association and Executive Chairperson, Aspect Global Ventures said, "Gold prices remain in a consolidation phase as U.S. President Donald Trump reaffirmed there would be no extension to the August 1 deadline for reciprocal tariffs. This stance has raised concerns over increased risk aversion in the markets. Additionally, the threat of significant tariffs on copper and pharmaceutical exports has added to market uncertainty, though these developments have not been strong enough to push gold prices higher."
He added, "In the near term, trade tensions and tariff developments will remain key drivers for gold."
Disclaimer: The recommendations made above are by market analysts and are not advised by either the author, nor Greynium Information Technologies. The author, nor the brokerage firm nor Greynium would be liable for any losses caused as a result of decisions based on this write-up. Goodreturns.in advises users to consult with certified experts before making any investment decision.
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