Gold Rate Today: MCX to resume trade soon; here’s all you need to know about yellow metal now

Gold Rate Today: Gold prices in the international market hit an all-time high on Monday, as a slowing US inflation trend boosted expectations the Federal Reserve could deliver its first interest rate cut soon, while silver scaled a more than 11-year peak.

In view of the Lok Sabha Elections, Multi Commodity Exchange of India Limited (MCX) is closed today for trading in the morning sessions i.e., 9 AM to 5 PM.  However, India's first listed exchange will open for the evening session i.e., 5 PM to 11:30 PM /11:55 PM.

As of May 17, 2024, MCX gold futures (Jun 5) were sluggish, up 0.05 per cent or Rs 39 at Rs 73,750 per 10 grams. Meanwhile, MCX Silver futures (Jul 5) were up 0.14 per cent or Rs 125 at Rs 91,149 per kg.

Gold Rate Today: Here’s all you need to know about yellow metal now

-Gold prices have experienced a significant rise, driven by a combination of economic indicators, central bank policies, and escalating geopolitical tensions.

-The recent increase in the Price Index (PPI) for April indicates that inflationary pressures still present in the economy, leading investors to seek safe-haven assets like gold.

-Fed Chairman Jerome Powell highlighted the mixed PPI data, emphasizing that the restrictive monetary policy might need to persist longer than initially expected to effectively combat inflation. Despite this, the benchmark 10-year US Treasury bond yield declined by over 2% following the April inflation report, creating favourable conditions for gold to approach the $2,400 mark. Lower bond yields reduce the opportunity cost of holding non-yielding assets like gold, making it more attractive to investors, said Ajay Kedia, MD, Kedia Commodity. 

-Gold investors are closely monitoring upcoming Federal Reserve communications, including speeches by Fed officials, the release of FOMC Minutes, and preliminary Manufacturing and Services PMI data from S&P Global for May.

The policy statement after the FOMC meeting indicated that there has been limited progress towards achieving the Committee's 2% inflation target. This ongoing struggle to meet the inflation objective continues to support the bullish outlook for gold.

Should you invest in gold now?

"The potential shift towards more accommodative monetary policies by global central banks is also enhancing the appeal of gold. Easing policies lower the opportunity cost of holding gold, as interest rates decline and alternative investments yield lower returns," he said.

Given the current economic and geopolitical landscape, Ajay Kedia expects gold to surpass its previous target of Rs. 75,000 per 10 grams and test higher levels of Rs. 78,000 to Rs. 80,000 per 10 grams by the end of 2024.

Should you invest in silver now?

"Silver, which we had a predicted target of Rs. 100,000 on Diwali 2023, has already reached Rs. 91,000 and is anticipated to hit Rs. 100,000 by the end of 2024, with potential to aggressively target Rs. 120,000 within the same period," he added.

"The ongoing demand for safe-haven assets amid economic and geopolitical uncertainties continues to drive the upward momentum for both precious metals," he further said.

Here's a list of indicative spot gold prices in some of the major cities in the country:

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