Gold and Silver prices today: Yellow metal dips 0.8% as investors eye US inflation figures, anticipate Fed policy direction
Gold opened on the Multi Commodity Exchange (MCX) on Tuesday at Rs 62,149 per 10 grams and hit an intraday low of Rs 62,149. In the international market, prices hovered around $2,031.73 per troy ounce. Meanwhile, silver opened at Rs 72,596 per kg, hit an intraday low of Rs 72,341 on the MCX, and hovered around $23.11 per troy ounce in the international market.
Comex gold prices edge higher after a 1% decline as investors reassessed when the Federal Reserve will start cutting interest rate.
US Federal Reserve Governor Michelle Bowman said inflation could fall toward the Fed’s 2% target with interest rates at current levels, and offered potential backing for lowering borrowing costs if price pressures fade, according to a report in Bloomberg.
Comex gold prices declined 0.8% at the start of the week, as investors await US inflation figures this week for more cues on the Fed’s policy trajectory, after mixed jobs data last week prompted investors to pare back early rate cut bets. December NFP data showed that the economy added 216,000 jobs in December, however, the gains were concentrated in government, healthcare/education and leisure & hospitality sectors, which are mostly part-time and don’t reflect the underlying strength of the jobs market, per Kotak Securities Commodity Research report.
Meanwhile, Atlanta Fed Bank President Raphael Bostic said inflation has come down more than he expected and is on a path today to reach the Fed’s 2% goal, though it’s too early to declare victory. Geopolitical risks remain high after Hezbollah said a senior commander was killed in south Lebanon, amid rising concerns that the war between Israel and Hamas could escalate into a wider Middle East conflict. US CPI will be a make-or-break event for gold prices.
Comex Silver prices closed marginally lower on Monday, tracking weakness in bullions and base metals, amid prospects of a global slowdown coupled with fragile Chinese economic recovery. Silver prices steadied in early Asian trading on Tuesday, as Chinese authorities indicated they may lower the amount of money banks must set aside as reserves to boost lending, even after the central bank provided a massive amount of liquidity via other tools in recent weeks, the Kotak Securities report said.
The People’s Bank of China may use open market operations, medium-term lending facilities and reserve requirements, among other monetary policy tools, to provide “strong” support for reasonable growth in credit, Zou Lan, head of PBOC’s monetary policy department, told the state-run Xinhua News Agency.
Today, German Industrial production, the US trade balance and a speech by Federal Reserve Governor Michael Barr will be closely watched, per the report.