Most recent article: India Gold price today: Gold sees a sharp pullback, according to MCX data
Gold prices rose in India on Monday, according to data from India's Multi Commodity Exchange (MCX).
Gold price stood at 63,357 Indian Rupees (INR) per 10 grams, up INR 915 compared with the INR 62,442 it cost on Friday.
As for futures contracts, Gold prices increased to INR 63,590 per 10 gms from INR 63,357 per 10 gms.
Prices for Silver futures contracts decreased to INR 77,630 per kg from INR 78,087 per kg.
|Major Indian city
Global Market Movers: Comex Gold price retreats further from all-time high amid a pickup in USD demand
- The global risk-on rally hit a roadblock after an attack on an American warship and commercial vessels in the Red Sea on Sunday by Iran-backed Houthi rebels in Yemen.
- A US military official confirmed that a "self-defense strike on an imminent threat" killed five Iraqi militants near the northern city of Kirkuk on Sunday afternoon.
- A modest US Dollar uptick overshadows the risk of a further escalation of geopolitical tensions in the Middle East and prompts some profit-taking around the Comex Gold price.
- That said, growing acceptance that the Federal Reserve (Fed) will maintain the status quo in December and start cutting rates as early as March 2024 should lend support.
- Fed Jerome Powell on Friday said that it would be premature to conclude when policy might ease, pushing back against speculations of more aggressive rate cuts.
- Investors, however, seem convinced about an imminent shift in the Fed's policy stance, which should cap any recovery in the US bond yields and the Greenback.
- This week's US economic docket highlights the release of the ISM Services PMI on Tuesday, followed by the ADP report on private-sector employment on Wednesday and the US crucial NFP report on Friday.
- A recent survey by the World Gold Council showed that 24% of all central banks intend to increase their Gold reserves in the next 12 months, as they increasingly grow pessimistic about the US as a reserve asset.
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Why do people invest in Gold?
Gold has played a key role in human’s history as it has been widely used as a store of value and medium of exchange. Currently, apart from its shine and usage for jewelry, the precious metal is widely seen as a safe-haven asset, meaning that it is considered a good investment during turbulent times. Gold is also widely seen as a hedge against inflation and against depreciating currencies as it doesn’t rely on any specific issuer or government.
Who buys the most Gold?
Central banks are the biggest Gold holders. In their aim to support their currencies in turbulent times, central banks tend to diversify their reserves and buy Gold to improve the perceived strength of the economy and the currency. High Gold reserves can be a source of trust for a country’s solvency. Central banks added 1,136 tonnes of Gold worth around $70 billion to their reserves in 2022, according to data from the World Gold Council. This is the highest yearly purchase since records began. Central banks from emerging economies such as China, India and Turkey are quickly increasing their Gold reserves.
How is Gold correlated with other assets?
Gold has an inverse correlation with the US Dollar and US Treasuries, which are both major reserve and safe-haven assets. When the Dollar depreciates, Gold tends to rise, enabling investors and central banks to diversify their assets in turbulent times. Gold is also inversely correlated with risk assets. A rally in the stock market tends to weaken Gold price, while sell-offs in riskier markets tend to favor the precious metal.
What does the price of Gold depend on?
The price can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can quickly make Gold price escalate due to its safe-haven status. As a yield-less asset, Gold tends to rise with lower interest rates, while higher cost of money usually weighs down on the yellow metal. Still, most moves depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAU/USD). A strong Dollar tends to keep the price of Gold controlled, whereas a weaker Dollar is likely to push Gold prices up.
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