MCX gold trades flat, with gold headed for its largest weekly increase in two months

The price of gold is trading unchanged on Friday, while the price of silver is up 0.23%. Gold June futures were selling at Rs 61,469 per 10 grams on the Multi Commodity Exchange, down Rs 24 or 0.04%. On the MCX, silver May futures were trading at Rs 78,220 per kilogram, up Rs 182. Globally, the yellow metal prices remained unchanged on Friday but are expected to post their highest weekly gain in almost two months as concerns over the country’s banking system and expectations of a slowdown in the U.S. Federal Reserve’s interest rate hike cycle increased demand for the metal as a safe haven. Spot gold was barely changed at $2,050.63 per ounce, up 3% for the week. Futures for U.S. gold increased by 0.1% to $2,058.50.

“On Thursday, the COMEX Gold futures reached a high of $2,085.4 per troy ounce before giving up some of their early gains as the US banking crisis increased demand for safe-haven assets. While MCX gold prices surged to a record high of Rs.61,845 per 10 grams yesterday, international gold prices are not far off the all-time high of $2,089.2 per troy ounce reached during COVID. The Fed chair Powell hinted that the most recent interest rate rise by the US central bank might be the last one, but he refrained from declaring victory in the fight against sharp price increases during the May FOMC meeting. Swaps are pricing in a nearly 80 basis point rate drop this year in the midst of the present financial crisis, helping bullion commodities.

“Gold price poised for greatest weekly gain in almost two months as banking concerns and expectations of a slowdown in the U.S. central bank’s interest rate hike cycle boosted the metal’s allure as a safe haven. Despite no longer stating that it “anticipates” more rate rises, the Fed increased rates by 25 basis points. On Wednesday, the U.S. Federal Reserve hinted at a potential slowdown in interest rate increases and expressed worries about growth along with inflation. PacWest Bancorp is considering strategic alternatives, such as a possible sale or capital raising, after a liquidity increase it announced in March failed to boost confidence in its faltering share price. PacWest Bancorp is the second SVB, Frist republic to do so.

The ECB reduced the rate of rate rises on Thursday, but it hinted at more tightening. Following a favorable report on private payrolls, market investors will now pay close attention to the US non-farm payroll, unemployment rate, and average hourly earnings statistics that are slated for release later today. Updates on US banking issues and the debt ceiling, which are fueling market turbulence, will also be a point of emphasis. According to Manav Modi, MOFSL, the overall trend on the COMEX might be between $2040 and $2060, while prices domestically could be between Rs 61,100 and Rs 62,000.

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