Gold prices saw a significant uptick today, as the MCX gold rate opened higher at ₹98,248 per 10 grams, reflecting a noticeable rise from Thursday’s closing price of ₹97,874 per 10 grams. Within minutes of market opening, the price even touched an intraday high of ₹98,378 per 10 grams. The surge came on the back of weak US economic data, which overshadowed early optimism following US President Donald Trump’s call with Chinese President Xi Jinping.
Tim Waterer, Chief Market Analyst at KCM Trade, commented, “Some of the initial enthusiasm for risk appetite following the Trump-Xi call has started to wear off, which has allowed gold to creep higher.” Waterer further noted that Trump’s optimistic stance had previously masked some of the weak US economic data.
Factors Fueling Gold’s Rally
According to Jateen Trivedi, Vice President of Research at LKP Securities, the gold price rise today is primarily driven by a weaker US dollar and renewed demand for gold as a safe-haven asset. Geopolitical tensions, coupled with concerns about ongoing US debt issues and the trade imbalance, continue to support bullish sentiment in the bullion market.
Trivedi highlighted that, “Gold prices are likely to trade in a positive range between ₹97,000 and ₹99,500 in the short term, with market sentiment heavily influenced by upcoming US economic data and geopolitical developments.”
US Payroll Data in Focus
Investors are now eagerly awaiting the release of the US nonfarm payroll (NFP) data, which will be published on Friday. This data comes after a series of weak economic indicators this week, especially highlighting softness in the labor market.
Waterer further stated, “The upcoming NFP report could act as a catalyst for a breakout in gold prices, especially if the data significantly deviates from expectations.”
Federal Reserve’s Stance
As gold often benefits during times of economic uncertainty and low-interest-rate environments, market participants are paying close attention to the Federal Reserve’s policy stance. Recent statements from Fed policymakers suggest that concerns about inflation still outweigh any issues related to a cooling labor market, signaling that monetary policy adjustments may remain on hold for an extended period.
With the global economic outlook remaining uncertain and inflationary pressures still prevalent, gold continues to serve as a stable store of value. Investors will continue to monitor economic indicators and geopolitical developments closely, as they look for signals that may further propel the price of gold.
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