Gold prices experienced a decline on Tuesday, attributed to mounting expectations of fewer U.S. interest rate cuts throughout the year, which overshadowed the demand for safe-haven assets amid ongoing tensions in the Middle East.
By 09:26 ET (1326 GMT), spot gold had decreased by 0.2 per cent to $2,376.90 per ounce. Notably, the precious metal had reached a historic high of $2,431.29 on Friday, fueled by anticipation of Iran’s retaliatory actions against Israel.
Also read: Gold prices likely to go up to $3,000 an ounce: Citi Report
Additionally, Monday’s data revealed that U.S. retail sales had surpassed expectations for March. Concurrently, 10-year Treasury yields had risen for the second consecutive day, diminishing the attractiveness of non-yielding bullion.
“The precious metal has been sky rocketing in the last one and a half month from 62200 zone to touch 72800 levels gaining almost 17% in a very short span of time. Currently with the geo-political tensions looming around, the yellow metal is anticipated to gain further in the coming days with near-term targets of 73200 and 75300 levels. The near-term support would be maintained near 70200 zone as of now,” said Vaishali Parekh Vice President – Technical Research, Prabhudas Lilladher Pvt. Ltd.
Around five weeks ago, Federal Reserve Chair Jerome Powell informed a U.S. Senate panel that the Fed was nearing confidence in inflation reaching the necessary level for interest rate cuts. However, recent strong economic data has caused some doubt among policymakers, investors, and external analysts regarding this outlook.
Also read: Gold rate today: Iran-Israel conflict fuels gold price today despite US dollar hitting 5-month high
The Shanghai Futures Exchange announced an increase in the trading bands for gold and silver contracts, with adjustments to 8 per cent for gold and 7 per cent for silver, up from the previous levels of 6 per cent and 7 per cent, respectively.
Back home, gold and silver prices reached new record highs on Tuesday continuing their upward trajectory for the second consecutive day, mirroring robust trends in global markets amidst concerns of increasing tensions in the Middle East.
According to HDFC Securities, gold prices surged by ₹700 on Tuesday, reaching an all-time high of ₹73,750 per 10 grams in the national capital. This rise follows Monday’s closing price of ₹73,050 per 10 grams.
“Gold traded strongly as global markets reacted negatively to Israel’s statement regarding Iran’s drone attack retaliation, leading to increased safe-haven buying in gold prices. MCX Gold surged by 300rs to reach 72600, while Comex gold reached 2370$ with overnight gains. Looking ahead, sentiment remains bullish for gold as long as geopolitical tensions persist and escalate,” said Jateen Trivedi, VP Research Analyst – Commodity and Currency, LKP Securities.
Also read: Gold declines as dollar, yields strengthen following US retail sales data
Silver experienced a 1.4 per cent decline, reaching $28.48 per ounce, meanwhile, back home silver by ₹800, reaching an all-time peak of ₹86,500 per kilogram.
On the other hand, platinum saw a 0.3 per cent increase, reaching $971.85, and palladium decreased by 1.3 per cent to $1,021.75.
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