Gold price jumps as US CPI data fuels US Fed rate cut buzz. Will it climb to a new peak as silver price hits new high?

Gold rate today: Following the US Fed rate cut buzz after the US CPI data meeting the market estimates, gold price today opened upside in the early morning session. Extending the rally for yet another session, gold futures contract on the Multi Commodity Exchange (MCX) for June 2024 expiry opened upside at ₹73,128 per 10 gm and touched an intraday high of ₹73,230 within a few minutes of the commodity market's opening bell today. In the international market, spot gold prices oscillate around $2,389 per ounce, whereas COMEX gold prices quote $2,394 per troy ounce. While climbing to the intraday high, MCX gold rate came close to its existing record high of ₹73,958 per 10 gm. However, the silver price on MCX touched a new peak of ₹87,476 per kg.

US Fed rate cut buzz

On reasons fueling gold and silver prices these days, Anuj Gupta, Head of Commodity & Currency at HDFC Securities, said, "Gold and silver prices are ascending today as the US CPI data released yesterday has met the market estimates. It has triggered buzz for the US Fed rate cut. This US Fed rate cut buzz has put the US dollar under pressure, and the US dollar index has slipped below the 105 mark and has been oscillating close to the 104 mark."

US CPI data in focus

Speaking on the immediate trigger that is fueling gold and silver price today, Praveen Singh, Associate VP — Fundamental Currencies and Commodities at Sharekhan by BNP Paribas said, "The US CPI (April) m-o-m was noted at 0.30% Vs the forecast of 0.40%, though y-o-y inflation data at 3.4% matched the estimate. CPI food and energy y-o-y and m-o-m at 3.60% and 0.30%, respectively, were also in line with their respective forecasts. Retail Sales advance (April) m-o-m stagnated against the forecast of +0.40%. The retail sales control group came in at -0.30%, compared to the forecast of +0.10%. US NAHB Housing Index trailed the forecast, too. Overall, there is nothing much positive in the US inflation report as the data remain way above the Fed's desired goal of 2% across the board. However, with the US Federal Reserve trying to assuage the market's concerns about inflation and looking forward to rate cuts with weakening data, the report may push up commodities prices at least in the near term."

Will the gold price climb to a new peak?

Looking ahead to the future of gold and silver prices, Anuj Gupta of HDFC Securities reiterated his predictions, "The current hurdle for MCX gold rate is at the ₹73,200 mark. Once this resistance is decisively breached, we could see the yellow metal's price reaching a new high. Similarly, the silver rate is currently in the $28 to $30 per troy ounce range. We anticipate silver prices to touch the ₹89,000 mark in the near term, reinforcing our confidence in these potential market movements."

Underscoring the key triggers for gold and silver price movements in the near term, Anuj Gupta cautioned, "The US job data is due today. Gold investors should remain vigilant as any positive outcome in this data could significantly impact the US Fed's decision on interest rate cuts."

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.