Gold price stays close to highest ever while silver drops after reaching best ever

Analysts say that after going up by about 10% in March, the price of gold will be influenced by the latest US job and inflation figures expected this week.

Gold prices started at Rs 69,475 for 10 grams on the Multi Commodity Exchange (MCX) on Friday. They dropped to Rs 69,297 during the day. Internationally, gold prices were about $2,279.76 per ounce.

On the other hand, silver began at Rs 79,339 per kg on the MCX and went down to Rs 78,777 within the day. In the global market, silver was around $26.57 per ounce.

Kaynat Chainwala, who works as a Senior Manager in Commodities Research at Kotak Securities, said that the price of gold in COMEX futures market went down from its highest point ever, which was $2325.3 per troy ounce. This happened because investors were thinking about comments from officials at the Federal Reserve, who seemed to be leaning towards raising interest rates. They also were being careful before the release of the US Non-Farm Payrolls (NFP) data later in the day. Neel Kashkari, who is the head of the Federal Reserve Bank of Minneapolis, said on Thursday that they might not need to lower interest rates this year if inflation doesn’t go up, especially if the economy continues to do well. Gold prices had gone up by almost 10% in March and by over 1% in April so far. The movement of gold prices might depend on the US Jobs data and inflation numbers that will be released this week and next. Also, tensions between Iran and Israel might make investors more interested in gold as a safe investment.

Manav Modi, who analyzes commodities and currencies for MOFSL, said, “The price of gold is staying high, while silver saw some profit-taking after reaching a new high. This is because people are expecting the US to lower interest rates, and there’s more demand for safe investments and industrial use of silver.”

There are tensions in the Middle East and between Russia and Ukraine, and a big earthquake in Taiwan. Because of this, people are investing more in safe assets like gold and other precious metals. The US dollar is also getting stronger, and US government bonds are still offering high returns.

Federal Reserve officials, including the head Jerome Powell, are still discussing whether to lower interest rates. Many people think they might do this in June, but they want to look at more data first.

Data showed that more Americans than expected filed for unemployment benefits last week, suggesting the job market is slowly getting better. Earlier this week, reports on US factory orders and ADP employment change were better than expected, which might have some delayed effects before the important US Non-farm payroll data comes out later today.

The US unemployment rate is expected to stay the same as predicted, at 3.9%. However, the US Non-farm payroll data is expected to be slightly lower than last month. If there are signs that the job market is getting better, it could make the Federal Reserve less hesitant about cutting interest rates this year.

Jateen Trivedi, a VP Research Analyst at LKP Securities, mentioned that gold trading has been relatively weak lately, with prices fluctuating between 69900 and 69600. This could be because Comex gold faced some resistance near the $2300 mark after a strong rally in prices over the past month, pushing them into a territory where they might be considered too expensive. As a result, gold prices might be volatile in the coming days, especially with important data releases like the Nonfarm Payroll and Unemployment data on Friday. It’s expected that gold will find strong support at 69400, but if it drops below this level, it could decline further towards the 68500 zone.