Gold Prices Drop on MCX Following Weak Global Cues and Economic Developments

Services

Equity Trading with CA Abhay

FNO Stocks with CA Abhay

Equity Investment with CA Abhay

Option Trading with CA Abhay

Stock Market Masterclass

Gold Prices Decline Amidst Global Economic Factors and Market Movements

Team FS

10/Jun/2024

Key Points:

Gold prices on MCX fall by 0.48% following weak global cues and recent economic developments.
Decline attributed to a stronger-than-expected US jobs report and China's pause in gold purchases for reserves.
Market uncertainties arise from changing Federal Reserve policy expectations and upcoming US inflation data.

Gold prices witnessed a decline on Monday, June 10, influenced by various global economic factors and market movements. On the Multi Commodity Exchange (MCX), gold contracts for August delivery traded lower by ₹345 or 0.48% to ₹71,008 per 10 grams, with a business turnover of 15,759 lots. Analysts attribute this fall to weak global cues and recent economic developments, signaling market uncertainties.

Factors Contributing to Decline:
The decline in gold prices follows a dramatic 3.5% drop on Friday, marking the biggest one-day decrease since November 2020. This drop was triggered by a stronger-than-expected US jobs report and the announcement from China's central bank that it paused gold purchases for its reserves in May after 18 consecutive months of buying. Kelvin Wong, a senior market analyst for Asia Pacific at OANDA, noted that the recent robust US jobs data has impacted market expectations regarding Federal Reserve policy, leading to decreased bets on interest rate cuts in September.

Impact of Federal Reserve Policy Expectations:
The Federal Reserve is not anticipated to make any changes during its upcoming policy meeting, but investors will closely watch comments from Fed Chair Jerome Powell and updates to economic projections from policymakers. Additionally, US inflation data, due on Wednesday, June 12, will be a critical indicator for future market movements. Wong highlighted the significance of the dot plot pricing, stating that unless the Fed's expectations become less dovish, a tremendous sell-off in gold could occur, pushing US 10-year Treasury yields higher.

Conclusion:
The decline in gold prices on MCX reflects the influence of global economic factors, including the US jobs report, China's gold purchase pause, and changing Federal Reserve policy expectations. As market uncertainties persist, investors will closely monitor upcoming economic indicators, such as US inflation data, for insights into future gold price movements.

Also Read : KEC International Surges as Orders Worth ₹1,061 Crore Pour In

Join our Telegram Channel and WhatsApp Channel for regular Updates.

Services

Gold Prices Decline Amidst Global Economic Factors and Market Movements

Related News