Gold Prices Today: Yellow metal hits one-month high on renewed US Fed rate cut hopes; silver up 3%

Gold prices extended gains on Friday, July 5, to achieve their highest level in a month following key US jobs data showing the labour market was softening. This raised expectations of an interest rate cut by the US Federal Reserve in September.

Spot gold was up 1.1 per cent at $2,380.91 per ounce. Bullion is up more than two per cent for the week so far. US gold futures gained 0.8 per cent to $2,389.10. Spot silver rose 2.3 per cent to $31.10 per ounce and is on track for its best week since May 17. 

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Platinum rose three per cent to $1,032.25 per ounce, and palladium gained 0.8 per cent to $1,025.75. Regarding domestic prices, gold futures last traded 0.93 per cent higher at ₹73,038 per 10 grams on the multi-commodity exchange (MCX).

Gold at one-month high: What's pushing the yellow metal?

-Analysts said that gold is trading at one-month highs as lower payroll revisions and yet another uptick in the unemployment rate helped 'cement' a September rate cut. Bulls are eyeing a return to $2,450 all-time highs if the Fed openly hints at September.

-Data showed US non-farm payrolls grew by 206,000 jobs in June, slightly higher than estimates. Estimated job growth for May was revised down to 218,000 new jobs from 272,000, while April's job growth was revised down to 108,000 new jobs from a previous 165,000. 

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-The unemployment rate rose to 4.1 per cent, slightly higher than the estimated four per cent. Following the data, US interest-rate futures prices reflected continued market confidence in a September rate cut, with the implied probability remaining at about 72 per cent.

-Traders are also pricing in a rising chance of a second rate cut in December. Lower rates reduce the opportunity cost of holding non-yielding gold. The dollar slipped to a three-week low against its rivals, making gold less expensive for other currency holders, while yield on the benchmark US 10-year Treasury note crept lower.

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Where is gold headed?

Analysts said that comex gold extends gains amid rising bets that the Federal Reserve will trim interest rates before year-end after poor US economic data. Swaps traders are now pricing in a 70 per cent chance of a rate cut in September, according to Kaynat Chainwala, AVP-Commodity Research, Kotak Securities.

Jateen Trivedi, VP Research Analyst - Commodity and Currency, LKP Securities said that the support for gold is seen at ₹72,100 and resistance at ₹73,100.

‘’We expect gold and silver to maintain their bullish momentum in the upcoming sessions. Gold has support at $2,342-$2,326 and resistance at $2,378-$2,391. Silver has support at $30.28-$30.10 and resistance at $30.74-$30.92. In INR, gold has support at ₹72,070- ₹71,910 and resistance at ₹72,620- ₹71,810. Silver has support at ₹89,440- ₹88,880 and resistance at ₹90,740- ₹91,220,'' said Rahul Kalantri, VP Commodities, Mehta Equities.

Disclaimer: The views and recommendations provided in this analysis are those of individual analysts or broking companies, and not Mint. We strongly advise investors to consult with certified experts before making any investment decisions, as market conditions can change rapidly and individual circumstances may vary.