New Delhi [India]: Gold prices edged higher in the Indian bullion market today, with 24-carat gold rising 0.5% to ₹143,610 per 10 grams. Silver, meanwhile, slipped 0.1% to ₹228,550 per kilogram.
On the Multi Commodity Exchange (MCX), gold for the August contract was trading 0.5% higher at ₹143,200 per 10 grams, while silver for the September contract was marginally lower at ₹228,421 per kilogram at the latest update.
Global markets
Gold prices remain under pressure, extending their recent decline and trading below both the 100-day and 200-day moving averages. The weakness is largely being driven by the strength of the U.S. Dollar Index and expectations that the U.S. Federal Reserve could raise interest rates at least once more this year.
Markets are reacting to stronger-than-expected U.S. economic data. Job openings have climbed to a two-year high, while investors are now awaiting the closely watched U.S. non-farm payrolls report for further cues on the Federal Reserve's policy outlook.
The weakness is visible across Asian markets as well, with both gold and silver trading lower. Gold remains the bigger focus, with prices hovering below the $4,000-an-ounce mark—near their lowest levels in eight months.
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June proved to be particularly challenging for bullion. Gold prices fell around 11.5% during the month, while the June quarter recorded a decline of nearly 13%—the weakest quarterly performance in 13 years. Despite the recent correction, gold is still up about 18.5% over the past 12 months, although it remains down roughly 7.5% so far this year after hitting record highs earlier.
Turning to the Indian market, gold imports have also slowed considerably. January saw record imports of nearly 100 tonnes, supported by all-time-high ETF inflows. However, imports have steadily declined since then. The increase in import duty announced in April further dampened demand. Even so, cumulative gold imports during the first half of the year remain around 50% higher than the same period last year.
Credit rating agencies on Gold
Market sentiment has also turned more cautious, prompting several global investment banks to revise their gold price forecasts lower. JPMorgan now expects gold to reach around $5,200 an ounce by the end of the year, while Goldman Sachs has lowered its target to $4,900.
UBS has revised its forecast to $4,600, Deutsche Bank expects prices around $4,300, Citigroup has one of the most bearish outlooks at $4,000, and Morgan Stanley sees gold at approximately $4,800 an ounce.
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Notably, many of these institutions had earlier projected gold prices could climb to $5,600 or even $6,000 an ounce.
However, amid changing macroeconomic conditions and expectations of higher U.S. interest rates, forecasts have been revised significantly lower.
Ends.
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