MCX gold trades near-all time high on Fed hopes of early rate cut; base metals fall

Prices of gold rose 0.2% on MCX today to reach ₹74,303 per 10 grams, and touching an intraday high of ₹74,538, only marginally shy of the ₹74,777 on May 20 this year.

The price of gold has been on an upswing, tracking international prices, as expectations rise the Federal Reserve will cut interest rates for the first time since 2020 as consumer prices cool.

The most recent inflation print of 3% has given hopes that the Fed could cut rates at its September meeting. An interest rate cut typically weakens the US dollar, which competes with gold for safe-haven status.

Silver was up 0.5% to trade at ₹92,407 per kg but the precious metal is well below its lifetime high of ₹98,220 it clocked on May 29.

Gold and silver were also the most actively traded contracts on MCX with volumes of ₹1,845 and ₹1,635 crore, respectively.

Energy

Among energy commodities, crude oil gave up early gains to trade marginally in the red while natural gas was up 1.4%.

Crude oil prices were up earlier in the day after the US Energy Information Administration reported a 4.9-million-barrel fall in inventories, more than what analysts expected. The news offset weak oil consumption data that has been coming out of China of late.

But traders likely chose to book profits later as they awaited further cues from economic data from the US such as the weekly jobs data due today.

Natural gas rebounded after its recent dip tracking a production dip in the US and as the international commodity price reversed after touching the key $2 per mmBtu level.

Base metals

All base metals except aluminium were trading in the red, with copper prices down over 1%. The metal has been tracking weak consumption data coming out of China – the world’s biggest consumer of copper.

At ₹831, Copper is down about 15% below its all-time high of ₹957.