Gold prices surged to a weekly high on Thursday, following cooler inflation figures for May 2024. Spot prices rose 0.3% to $2,333.62 per ounce, the highest level since June 12. Futures prices held steady at $2,347.30 per ounce.
The rise in the yellow metal’s price could be due to market participants expecting an early interest rate cut. The latest inflation reading has reignited investor hopes for the Federal Reserve to prepone their planned rate cut. The cooling labor market and softer retail sales point toward weaker economic activity for the second quarter of 2024.
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Mehta Equities Ltd’s VP of Commodities, Rahul Kalantri states, “Gold has support at $2220-2198 per ounce and resistance at $2354-2370 per ounce. In India, gold has support at ₹71,510-70,360 per 10 grams and resistance at ₹71,940-72,250 per 10 grams.“
Will gold continue to rise and will the Fed cut rates soon?
According to the analysts at ANZ, “We hold a positive view for gold with a price target of $2,500 per ounce by the end of 2024.“
Tim Waterer, chief market analyst at KCM Trade, also favors markets for the yellow metal moving towards the upside. He stated, “The market seems content to consolidate recent gains until more evidence of softening US data emerges.“
Also Read: US Inflation Falls at 3.3% in May 2024
Whether the Federal Reserve begins to cut rates is yet to be seen. The Fed left interest rates unchanged earlier this week, despite cooling inflation. numbers. The Fed is likely waiting for more concrete proof of inflation figures dropping.
Fed Chair Jerome Powell stated, “Really, it’s going to be not just the inflation readings. It’s going to be the totality of the data, what’s happening in the labor market, what’s happening with the balance of risks, what’s happening with the forecasts, what’s happening with growth.“
