MCX Gold futures edge higher after lower-than-expected producer price index data, silver trades in the red

MCX Gold futures opened in the green on Friday after the US producer price index unexpectedly fell 0.2% in May, supporting the case for an early rate cut. A reduction in interest rates brings down the opportunity cost of holding gold which itself does not yield anything.

MCX Gold futures maturing in August were trading 0.13% higher on Friday at ₹71,227 per 10 grams at 9:14 a.m. Earlier, the US Federal Reserve held its key interest rates but indicated only one rate cut is expected this year.

Meanwhile, according to media reports, participants in a precious metals conference in Singapore this week reflected enthusiasm about gold’s prospects in Asia this year. The conference witnessed political risks as a major theme with more than 40 countries holding elections this year, according to the report.

The metals space witnessed some mixed action. MCX Silver futures maturing in July traded 0.18% higher at ₹88,115 per kg on Friday at 9:18 a.m. after having hit a high of ₹88,320 during the session. Meanwhile, MCX Zinc futures maturing in June were trading 0.4% lower at ₹258.85 per kg.

Meanwhile, the MCX Crude Oil June Futures edged lower on Friday ahead of the release of the inventory reports from China, the world’s second-biggest consumer of the commodity. MCX Crude Oil June futures were trading 0.55% lower at ₹6,532 at 9:21 a.m.

Meanwhile, the MCX Natural Gas futures maturing in June were trading over 1% lower at ₹245.20.

With both the consumer and producer price inflation figures out of the way in the US, market participants will shift focus to the industrial production data from China and the US as well as the inflation in the Euro area.

June 17: Industrial Production (China)

June 18: Inflation (Euro Area), Industrial Production (United States)