MCX Gold Price Analysis Prediction forecast Today 
Gold Analysis covers:
For 13 September 2024
Analysis by Riteshkumar Sahu &
Devanshi Mehta of Kotak Securities
Commodities higher ahead of US Producer Inflation data, possible China Interest rate cuts
Comex Gold rose on Thursday to trade above $2,547 as investors awaited the release of new U.S. inflation data. The recent CPI report increased the likelihood that the Federal Reserve will cut interest rates by 25 basis points
. Will Gold Go up or down?
Gold Technical Analysis by Paresh Gordhandas
MCX Gold Price Today Rs. 71426
Gold Price Projection for Today: On Monday at the opening bell, weak trend is expected and then strong rise is expected. At the end of the session, the Gold is expected to end in Green.
Very short-Term Trade Angle:
Target Rs. 72034 (on higher side)
Stoploss Rs. 71019 (on lower side)
Analysis for the Week ahead by Kaynat Chainwala,
AVP Commodity Research, Kotak Securities:
Over the past fortnight, Comex gold prices have experienced significant volatility, trading in a broad range near all-time highs, with prices surging to over $2,564 per ounce before retreating to around $2,500. This fluctuation reflects investors’ reactions to the latest US economic data, which has tempered expectations for a substantial 50 basis point (bps) rate cut by the Federal Reserve in its upcoming September meeting. While gold found support near the $2,500 level, strong macroeconomic factors such as slowing manufacturing activity and weakening labor market data continue to influence its upward momentum.
The economic data has been mixed, with investors assessing the Federal Reserve’s future course on interest rates. Notably, the ISM Manufacturing Index for August revealed a sharper-than-expected decline in US manufacturing activity, underlining the sector’s ongoing challenges. This weakness, compounded by signs of labor market deterioration, has led to increased expectations of a rate cut by the Federal Reserve. While inflationary pressures have eased, producer prices have seen a steeper-than-anticipated rise, suggesting that inflation may not be fully under control. Federal Reserve Chair Jerome Powell, in his Jackson Hole speech, signaled that future rate cuts would be data-dependent, with inflation and labor market trends being key determinants.
During the first half of the fortnight, gold surged close to record highs as markets priced in a possible rate cut, following Powell’s dovish remarks at Jackson Hole. Powell’s speech reinforced confidence in future monetary policy easing, as he pointed out that inflation risks have decreased while the labor market has become more vulnerable. While market sentiment remained divided between a 25bps and 50bps rate cut at the Fed’s September meeting, drove bullish momentum for gold. The market has also been factoring in 100 bps worth of rate cuts through the Fed’s three remaining meetings for 2024. Further supporting gold prices were rate cut expectations by the European Central Bank (ECB) as softer-than-expected inflation data from Germany, Spain, and Ireland hinted at potential policy easing by the ECB. Additionally, rising geopolitical tensions in the Middle East and the ongoing Russia-Ukraine war have sustained safe-haven demand for gold.
However, the rally in gold prices faced a setback following the release of US Gross Domestic Product (GDP) data, which showed a stronger-than-expected increase in economic growth. The second estimate for Q2 2024 GDP growth was revised upward to 3%, from 1.4% in Q1, surpassing expectations of 2.8%. This growth, coupled with consumer spending data, suggested that the US economy remains resilient despite higher interest rates, reducing the Fed’s urgency to cut rates. As a result, gold prices corrected by around 2.4%, with pressure from a stronger US dollar and rising bond yields.
Despite this correction, gold prices have started to rebound due to renewed expectations of a rate higher rate cut in the September Federal Open Market Committee (FOMC) meeting. Weakening labor market data has fueled these expectations. In August, ADP reported that US private employers added the fewest workers in three and a half years, while job openings saw a sharp decline in July. These signals of a softening labor market, alongside subdued manufacturing activity, have raised concerns about the US economy’s health and bolstered the case for a 50bps rate cut. Meanwhile, an unexpected rise in the ISM Services PMI, reflecting increases in new orders and prices, helped alleviate some concerns about economic slowdown.
In addition to interest rate expectations, gold’s safe-haven appeal remains robust due to ongoing geopolitical tensions. Furthermore, August saw continued inflows into global gold ETFs, which grew by US$2.1 billion, marking the fourth consecutive month of positive performance. North American funds contributed the most, with inflows of US$1.4 billion, followed by European funds with US$362 million. This sustained demand for gold ETFs underscores investor confidence in gold as a hedge against inflation and currency volatility.
Gold moves are highly influenced by economic data releases, interest rate expectations, and geopolitical tensions. While stronger-than-expected economic indicators have occasionally challenged upward momentum, the overall trend has been supported by the anticipation of interest rate cuts and heightened geopolitical risks. The weakening labor market and ongoing efforts to manage inflation have renewed bullish sentiment for gold. As investors closely monitor macroeconomic developments, the precious metal’s appeal as a hedge against both inflation and global uncertainty remains strong, positioning gold for potential gains in the near future.
Quicklinks
