Gold Prices Surge 1% as US Yields Decline, Boosting Demand

Gold prices experienced a notable increase on February 11, 2024, as declining US Treasury yields bolstered demand for safe-haven assets. On the Multi Commodity Exchange (MCX), April futures contracts for gold rose nearly 1% to reach Rs. 1,58,436 per 10 grams. Similarly, silver futures for March delivery surged approximately 3.3%, trading at Rs. 2,60,838 per kilogram.

The domestic gold market saw a slight decline earlier in the week, with the price of 24K gold decreasing by Rs. 27 to Rs. 1,58,510 per 10 grams. The price of 22K gold also fell by Rs. 25, bringing it to Rs. 1,45,300 per 10 grams. Notably, prices varied across major cities: in Mumbai and Kolkata, the price of 24K gold stood at Rs. 1,58,510, while in Chennai, it was slightly higher at Rs. 1,59,280. In Delhi, the price was recorded at Rs. 1,58,660.

Global Markets Fuel Bullion Rally

International bullion prices strengthened, following a decrease in US Treasury yields. April gold futures in the US increased by about 1%, trading above $5,070 per troy ounce, while spot gold hovered near $5,040 per ounce. Silver also rebounded from previous losses, reaching around $81.5 per ounce. The upward momentum in both gold and silver was supported by a weaker US dollar, which fell to approximately 96.6, making these precious metals more attractive to buyers using other currencies.

The latest economic data from the United States has raised concerns about the health of the economy, particularly after reports indicated stagnant consumer spending. Revised figures have intensified fears that high inflation and trade-related costs are negatively impacting demand. These developments have led to heightened expectations that the Federal Reserve may consider interest rate cuts later this year. Investors are paying close attention to forthcoming US macroeconomic releases, including the January non-farm payrolls report and inflation data expected later this week.

Market Insights and Future Projections

Looking ahead, analysts suggest that gold on the MCX may find strong support in the range of Rs. 1,55,500 to Rs. 1,54,000. Resistance levels are identified at Rs. 1,57,700, with a potential upward target around Rs. 1,59,000. For silver, support is expected at Rs. 2,48,800 and Rs. 2,44,000, while resistance levels are seen at Rs. 2,55,500 and Rs. 2,60,000.

On the international front, gold support levels are estimated at $5,000 and $4,970, with resistance at $5,080 and $5,122 per troy ounce. For silver, support is projected at $78 and $74.40, while resistance stands at $84.40 and $88 per troy ounce during today’s trading session.

As the market continues to react to economic indicators, investors remain vigilant, monitoring developments that could influence the price trajectory of these precious metals.