MCX Gold August futures continued their upward trajectory on Friday, trading nearly 0.3% higher at ₹73,312 per 10 grams as of 9:30 am, after peaking at an intraday high of ₹73,330. This increase is attributed to a decline in the dollar and treasury yields, fueled by speculation that the US Federal Reserve might cut interest rates in September 2024.
The European Central Bank (ECB) announced its first rate cut since 2019 on Thursday, reducing its key rate by 25 basis points. The ECB highlighted that since the Governing Council meeting in September 2023, inflation has decreased by over 2.5 percentage points and the inflation outlook has significantly improved.
Lower interest rates reduce the opportunity cost of holding gold, making it more attractive to investors.
Silver and Zinc Futures Also on the Rise
MCX Silver futures hit a one-week high, with July contracts reaching the ₹94,000 per kg mark in early trading. This follows a high of ₹96,493 recorded in late May.
Similarly, MCX Zinc futures for June have recovered some losses from the previous week, rising 0.17% to ₹262.15 per kg. The contract had previously dipped to a low of ₹256.30.
Energy Market Updates
Oil prices have recouped some losses from earlier sessions, buoyed by optimism that the US Federal Reserve will cut rates in September. Lower interest rates typically support oil prices by stimulating economic growth and boosting demand.
OPEC+ decided on Sunday to extend most of its oil output cuts through 2025. This decision aims to stabilize the market amid subdued demand growth, high interest rates, and increasing US oil production.
MCX Crude oil June futures were trading flat at ₹6,329 at 9:38 am, after hitting a low of ₹6,073 earlier in the week. Meanwhile, MCX Natural Gas June futures rose 1.2% to ₹236.80.
Upcoming Economic Data
Investors and traders are now eagerly awaiting the release of unemployment data and the US non-farm payrolls data scheduled for Friday. Key upcoming economic data includes:
June 8: Real GDP Growth (Euro Area)
June 12: Fed policy meeting, US Inflation data, China inflation data
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Gold Prices Get Two-week High Amid Expectations Of Central Bank Rate Cuts