The Gold June futures contracts were trading a tad higher at 72,536 per 10 grams on MCX as US Fed Chairperson Jerome Powell’s hawkish comments continued to influence markets. He ruled out the possibility of multiple rate cuts in the US this year.
“The price outlook is stable with the ongoing tension across West Asia supporting safe-haven demand while increasing expectations of fewer interest rate cuts in the United States countered some of the upward pressure,” said Geojit Financial Services.
The lack of further escalation in geopolitical tension pressurised the metal, too, said Praveen Singh, Associate Vice President of Fundamental Currencies and Commodities at Sharekhan by BNP Paribas. Also, the yellow metal saw a bull rally due to record buying by central banks in 2022 and 2023. This was to reduce their dependence on the US Dollar and hedge against economic uncertainties. Not just the central banks, but the retail sector in India and China also bought Gold strongly.
“The World Gold Council expects 2024 to be yet another year of robust buying by the central banks,” said Sharekhan in a research report. As per the World Gold Council, China’s wholesale demand fell in March, though investors continue to buy at high prices. “Gold is expected to decline further soon unless geopolitical tensions surface up yet again. The support for the metal is placed at $2320-2300, while the resistance is eyed at $2400-2450,” added Singh.
Further, the ten-year US yields corrected lower though as yields settled 1.72% lower at 4.59%. Consequently, the US Dollar Index at 105.96 was 0.35% lower.
The European Union intends to impose fresh sanctions on Iran. That could also impact prices in the near future.