The demand for gold escalated to bypass the value of spot gold at $2000 per ounce. The situation arose because of the deteriorating economic indicators in the US. The gold price has hit the highest level since last year. The constant outflow of the US dollar and yields on bonds have also led to the rise in gold demand. The gold price has achieved a rise of 1.8%. However, it is the highest for the bullion to touch $2024.79 since March 9, 2022. Currently, the Futures of US gold are valued at $2040.80, which is about a 2% rise.
Some other high-value metals have gained a high rapidly. A 4% rise in the value of Silver has made it valued at $24.9 per ounce. Similarly, a 3% rise in platinum has reached $1014 per ounce. Also, palladium gained over 1%, valued at $1078 per ounce. The United States Bureau of Labour Statistics published data on the number of job possibilities and their rate, which showed a respective decline of approximately 9.9 million (-632,000) or 6.0 per cent.
The various professional and business services contributed to the highest decline in job possibilities, i.e., about 2,78,000. Then the second highest decline was observed in the social assistance and health care sector, i.e., 1,50,000. Warehousing, transportation and other utility services contributed the third highest shrinkage, i.e., 1,45,000.
However, some sectors also showed an increase in job openings, viz. The construction in the sector showed an increase of 1,29,000 job openings. Further, the arts, recreation, and entertainment contributed 38,000 more jobs. February month showed a minute change in the individual hires regarding numbers. It was 6.2 million, and the rate was 4.0 per, centring the federal government’s increase monthly.
Mr David Meger, the metals trading director at High Ridge Futures, said the Fed would be nearer the conclusion of the interest rate cycle. So this is because the economic data is even weaker than expected. He also reported that the lower bond yields, along with droppings in the dollar, are propelling the rise in the price.
However, most of them, which account for about 60%, are showing a pause on it. Also, because of the cut production from OPEC+ in 2023, it is further pushing for inflation. So at this time of contention, gold is proving itself a potent haven to give an inflammatory hedge. The crude oil showed a rise of 6%, and there was a slight rise in profit bookings. Moreover, there was around a 0.8% dip in Brent crude to about $84.2 a barrel. Further, the US TWI dropped around 0.5% but held around $80 a barrel.
ICICI Direct’s April Monthly Commodities Outlook
According to ICICI Direct’s April monthly commodities outlook, gold prices increased last month. They reached 2014.9 levels last seen in April 2022, despite a sharp drop in the US dollar index and a decline in US 10-year treasury yields. Furthermore, demand for safe-haven assets increased as market sentiment remained fragile despite central banks’ efforts. Also, for its second consecutive meeting, the US Federal Reserve elevated interest rates by a lower amount, concluding the era of quicker rate increases and signalling the conclusion of the Fed’s rate hike drive. In addition, weakened US macroeconomic data maintained bullion prices.
On the MCX, gold futures for June 5 rose by 1.55% or 930 to end at 60944 per 10 grams. Silver futures maturing on May 5 rose by 3.52%, or $2535, to $74615 per kg.
ICICI Direct states that they anticipate that gold prices will stabilize near 58,600 and recover to 61,000 in April as the US dollar index weakens. Prices could rise due to predictions that US treasury yields throughout the curve will continue to be under pressure since the Fed anticipates ceasing tightening in response to lessening inflationary pressures and attempting to prevent a more widespread banking crisis.
In addition, the forecast for impending US economic data suggests the economy is experiencing the effects of a rate rise. The Fed’s strong rate hike is beginning to take a toll, and constricting credit conditions are affecting the US labour market.
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