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Losing shine? Investment demand for gold plummets to four-year lows
COMEX Gold prices saw a significant drop due to a surge in US treasury yields, resulting in the largest weekly loss in months. The US central bank indicated another rate hike before the end of the year and signaled fewer rate cuts for the following year. Strong economic data, including increased durable goods orders and low unemployment claims, supported the Federal Reserve's hawkish stance. The rebound in US home prices and rising energy prices also raised inflation concerns.
Gold may decline as Friday's US bonds relief rally likely to be tested
The US Federal Reserve, in a widely expected move, skipped a rate hike at its FOMC monetary policy meeting concluded on September 20. However, the Federal Reserve's stance was hawkish as the Central Bank increased the projected rate for 2024 to 5.10% from 4.60%, which implies a rate cut of 50 bps as against the previous estimate of a 100 bps rate cut.
Why industrial commodity prices are under pressure
Going ahead, as the traditional demand drivers of industrial metals have stalled, the short-term price outlook remains under pressure. Though the new demand areas like the clean energy sector are on the cards, they are unlikely to boost prices in the immediate run.
Commodity Talk: Crude oil could hit $105 in 2023, stoke inflation: Jateen Trivedi of LKP Securities
"If crude oil prices surge above $110 per barrel and remain at that level, it could potentially reignite inflation concerns. However, the robust demand outlook for 2024 projected by OPEC might help to mitigate this risk, as OPEC and other producers are likely to increase production after the end of 2023."
Commodity Talk: Time to sell on rally in MCX copper, says Saish Dessai of Angel One
There's a prevailing expectation in the streets for additional stimulus measures to support the declining economy. Nevertheless, the optimism witnessed in recent weeks, which drove metals prices higher, proved short-lived as macroeconomic factors outweighed the positive indicators.
Gold prices remain under pressure amid strong US economic data; focus now on CPI data this week
The Federal Reserve expressed concerns that this robust economic activity could lead to continued inflationary pressures, potentially necessitating further tightening. Moreover, the extension of the OPEC+ output cut led to a rise in oil prices, contributing to inflationary risks
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Crude oil price at 10-month high. Now what’s next?
Looking ahead, though a tight supply outlook offers support to oil prices in the immediate run, other catalysts like worries over the global growth outlook and a firm US currency likely to halt major gains. On the price side, US WTI crude has stiff resistance at $94 a barrel which needs to be cleared for further rallies. Otherwise, there are chances of a choppy with mild negative bias trading on the cards.
Commodity Talk: Bullion volatility is here to stay in near term, says Pritam Patnaik of Axis Securities
The diverse reading conveyed that the Federal Reserve might not immediately resort to more rate hikes to bring inflation to its long-standing target of 2% per annum from the 3% levels it currently is at. It's not surprising that the November rate hike odds are down to 36%.
Where are gold prices headed ahead of the festive season?
The period from October to December is the peak of wedding season in India. Key festivals like Diwali and Dussehra usually fall during the same period. Traditionally, this period is a significant driver for gold demand and thus, the metal prices.
Buying on dips likely to support gold prices
Bulls may attempt a shot at $1965 resistance in the near term. The interim hurdle comes at $1955 while support is at $1931/$1914. For now, dip buying is expected to be a preferred trade.
Commodity Talk: Avoid going long on gold ahead of Powell’s Jackson Hole speech: Naveen Mathur of Anand Rathi
It became increasingly difficult for Gold to compete on Yield in recent sessions. Speculation also persisted of a robust US jobless claims report last week suggesting that a resilient economy is making employers reluctant to reduce headcount.
Fed hinting at longer high interest rate regime casts shadow on gold's investment appeal
"The coming weeks would be important as the Chinese central bank is expected to throw some surprises, which should see some recovery in Gold amid broader risk-off sentiments. From the US the Federal Reserve’s annual Jackson Hole symposium returns as the key event this week as Chair Powell kicks off the event with an economic outlook speech on Friday."
Gold prices continue to slide amid strong Dollar and diminishing recession worries
Concerns about the US banking sector's health and weak Chinese economic data led to a haven shift towards the dollar.
Gold Rate Today: Gold falls ahead of RBI decision, US inflation data. Check price of yellow metal in Delhi, Ahmedabad & other Indian cities
The US CPI inflation data for July that is to be announced later in the day will be crucial for the metal, Singh said, adding that softer than expected CPI data may support the metal prices to some extent. However, the upside may remain capped as most of the recent US macroeconomic data have been mostly upbeat
Gold likely to remain rangebound with a bearish outlook next week
Global rating agency Fitch, which had kept the US Government's credit on a negative watchlist in May, downgraded the US government's credit rating to AA+ from AA on anticipated fiscal deterioration over the next three years, a high and growing general government debt burden, social security concerns and governance issues.
Crude oil prices rise to 3-month high. What’s next?
The Opec-plus countries, which pump almost 40% of the world’s crude, have a broader plan to limit supply into 2024 and prop up global oil prices. In October 2022 and April this year, the production cartel decided to cut output of its member countries to tackle the supply glut and boost prices.
