Today’s Gold and Silver Rates Surge on Profit Booking Trigger in US Dollar
The price of gold saw an early morning rise due to profit booking spurred by a weakening US dollar and a downturn in US government bonds. Gold futures contracts on the Multi Commodity Exchange (MCX) with a December 2023 expiry opened higher at ₹56.825 per 10 grams and quickly reached an intraday high of ₹58,880 after the commodity market’s opening.
In the international market, gold is priced at around $1,828.50 per ounce.
Similarly, silver rates today opened higher at ₹67,450 per kilogram on the MCX and reached an intraday high of ₹67,539 per 10 grams within minutes of the market opening. In the international market, silver prices are hovering around $21 per ounce.
The Rise in Gold and Silver Prices Explained
Anuj Gupta, Head of Commodity & Currency at HDFC Securities, attributed the rise in gold and silver prices to recent decreases in crude oil prices, dropping from around $96 per barrel to $86 per barrel. This decline sparked speculation about the US Federal Reserve not raising rates in their November meeting. Additionally, the US dollar index, which had climbed to an 11-month high and was overbought, experienced profit booking.
US Dollar Outlook
Anuj Choudhary, a Research Analyst at Sharekhan by BNP Paribas, expects the Indian Rupee to trade negatively due to global market risk aversion and the hawkish stance of most Federal Reserve officials. He also noted that the US Dollar index may rebound if US treasury yields continue to rise, but lower crude oil prices could mitigate this. Any intervention by the RBI may also support the Rupee at lower levels. Traders will monitor economic indicators from the US, including Services PMI, ADP non-farm employment, and factory orders. The USDINR spot price is anticipated to trade within a range of ₹82.80 to ₹83.70.
US Government Bond Market Impact
The surge in gold and silver prices can be attributed to a profit booking trigger in the US dollar, as explained by Anuj Gupta of HDFC Securities. US 10-year bond yields had reached a 16-year high, awaiting profit booking. The dip in the US dollar prompted a heavy rout in US government bonds, leading to increased investment in other assets such as equities and precious metals.
Key Price Levels for Gold and Silver
Anuj Gupta from HDFC Securities noted that the international gold price is fluctuating between $1,800 to $1,850 per ounce, while on the MCX, it’s ranging from ₹56,000 to ₹57,500 per 10 grams. As for silver, its price on the MCX is in the ₹63,000 to ₹68,000 per kilogram range, while in the spot market, it’s oscillating between $20 and $22 per ounce.