Gold Soars in Early Trade

29 Jul 2024 , 10:13 AM

Expectations of a September rate decrease by the US and growing geopolitical unrest in the Middle East supported higher gold prices on Monday. Attention then turned to the Federal Reserve’s policy meeting, which is scheduled for later this week.

Spot gold was up 0.5% at $2,397.65 an ounce. U.S. gold futures increased to $2,396.70, up 0.7%.

At its July 30-31 meeting, the Federal Open Market Committee of the United States central bank is anticipated to maintain current rates at 5.25%–5.50%. However, the rate futures market has completely priced in a 25 basis-point decrease in September as a result of cooling, poorer U.S. jobs data in June, and remarks from top Fed officials.

Bullion flourishes in an atmosphere with low interest rates. Bullion has long been regarded for its stability as a preferred hedge against geopolitical and economic dangers.

In terms of geopolitics, Israel’s security cabinet gave Prime Minister Benjamin Netanyahu’s administration permission to choose the “manner and timing” of a reaction to a rocket strike in the Israeli-occupied Golan Heights that claimed the lives of twelve teenagers and children. Israel and the US attributed the strike to the Lebanese armed group Hezbollah.

The two primary data points that are due this week are the ADP national employment report and the non-farm payrolls report.

Due to a spike in demand sparked by the government’s decision to lower import levies, gold premiums in India surged to their highest level in ten years last week.

Palladium increased 1.1% to $909.71, platinum increased 0.9% to $943.40, while spot silver gained 0.9% to $28.14 per ounce.

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