Gold Prices Surge on Weak US Job Data: Is it Time to Buy?

Ecem EFE07/06/20242 Mins read367

Gold Prices Surge On Weak Us Job Data: Is It Time To Buy?

Gold Price Jumps Amid US Fed Rate Cut Buzz: Considerations for Investors

Crypto News- In light of disappointing US job data and speculation surrounding a potential Federal Reserve rate cut, gold prices have shown significant bullish momentum. Early morning deals saw the gold futures contract on the Multi Commodity Exchange (MCX) for August 2024 expiry open at ₹73,237 per 10 gm, reaching an intraday high of ₹73,378 per 10 gm. Meanwhile, on the international front, Comex gold prices hovered around $2,400 per troy ounce, with spot gold prices close to $2,380 per ounce.

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Market Dynamics and Expert Insights

Commodity market experts attribute today’s rising gold rates to weak US job data released on Thursday, which has sparked talks of a US Fed rate cut in the upcoming September 2024 meeting. Additionally, the US dollar has hit a two-month low, and US Treasury yields are under selling pressure. These factors are not only driving the gold price rally but also offering a promising buying opportunity for gold investors during any market dips.

Anuj Gupta, Head of Commodity & Currency at HDFC Securities, provided insights on the situation: “Gold prices today are climbing globally due to the disappointing US job data, which has put pressure on US Treasury yields and the US dollar, fueling speculation about a Fed rate cut.”

Saish Sandeep Sawant Dessai, Base Metal Analyst at Angel One, echoed these sentiments: “Gold prices surged to a two-week high on Thursday following weaker-than-expected US jobs data, sparking speculation about a potential Federal Reserve interest rate cut later this year. Wednesday’s report showed that US private payrolls grew less than anticipated in May, with April’s figures also revised downward.”

Dessai also pointed out that most forecasters predict the Fed will reduce its key interest rate in September, with another cut expected later in the year. However, there’s a significant risk that fewer cuts may occur, a sentiment that contrasts with fluctuating market expectations.

Gold Price Outlook

According to Angel One experts, “Gold prices are poised to remain strong amid expectations of potential interest rate cuts by the Federal Reserve following weak US jobs data.” This outlook suggests that gold will continue to be an attractive investment option in the near future, driven by ongoing economic uncertainties and the prospect of lower interest rates.

FAQ on Gold Prices Surge and Fed Rate Cut Speculations

What is the current gold rate?

As of today, the gold futures contract on the Multi Commodity Exchange (MCX) for August 2024 expiry opened at ₹73,237 per 10 gm, reaching an intraday high of ₹73,378 per 10 gm. In the international market, Comex gold prices are hovering around $2,400 per troy ounce, with spot gold prices close to $2,380 per ounce.

Why are experts predicting a Federal Reserve rate cut?

Experts are predicting a Federal Reserve rate cut following weaker-than-expected US jobs data, which has raised concerns about the health of the economy. With US private payrolls growing less than anticipated, there is speculation that the Federal Reserve may lower its key interest rate to stimulate economic growth.

What impact does a Federal Reserve rate cut have on gold prices?

A Federal Reserve rate cut tends to weaken the US dollar and lower Treasury yields, making gold more attractive as an investment option. Consequently, gold prices often rise in response to expectations or announcements of rate cuts by the Federal Reserve.

Should investors consider buying gold amid these developments?

According to commodity market experts, the current environment presents a promising buying opportunity for gold investors. The combination of weak US job data, speculation about a Federal Reserve rate cut, and a decline in the US dollar and Treasury yields make gold an attractive investment option for investors looking to hedge against economic uncertainties.

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Ecem EFE

Since 2022, Ecem has been creating digital content, combining her passion for technology with writing. Continuing her education in the Mathematics department, Ecem focuses on producing in-depth content on areas such as blockchain, artificial intelligence, and cryptocurrency. She aims to simplify these topics and present them to a wide audience, sharing valuable insights into the crypto industry through her writing. With her innovative content, she strives to raise awareness in the digital world.