Gold Prices: 24K/100 Grams Rs 300 Away To Rs 7,40,000, 18K/10 Grams Below Rs 55,500; Weekly Outlook

Gold prices in India stayed muted on July 21 after falling by sharpest Rs 10,300 in 24K/100 grams cumulatively in three days. Nonetheless, 24K/100 Grams gold is just Rs 300 away from touching Rs 7,40,000, while 10 grams of this carat is below Rs 74,000. Also, 18K gold of 10 grams have slipped under Rs 55,500. 22K/10 grams is just Rs 200 shy of touching Rs 68,000.

Gold witnessed contraction after hitting new all-time high. As per SMC Global Securities' Wise Money report, gold reached record highs, with prices hitting $2488.4 on COMEX and Rs.74,731 on MCX. In contrast, silver prices fell for the second week on COMEX, while on MCX, it started fall last week only, resulting in a weaker gold-to-silver ratio.

Gold Prices In India:

Currently, 24K gold is at Rs 7,39,700 in 100 grams, away by Rs 300 from hitting Rs 7,40,00 levels. While 10 grams of gold in the same carat is at Rs 73,970. While 8 grams and 1 gram of gold is at Rs 59,176 and Rs 7,397 respectively.

Gold prices sees no change on July 21 after falling for three-consecutive day to the tune of Rs 10,300 in 24K of 100 grams.

Further, 22K of 100 grams is at Rs 6,78,000, about Rs 1,000 away from Rs 6,79,000 mark and also shy of Rs 2,000 from Rs 7,00,000. Here, 10 grams is available at Rs 67,800, 8 grams is at R 54,240, and 1 gram is at Rs 6,780.

In case of 18K, 100 grams of yellow metal is at Rs 5,54,800, merely Rs 200 away from reaching at Rs 5,55,000 level. While 10 grams of gold here is away by Rs 20 to touch Rs 55,500, and is currently at Rs 55,480. Also, 8 grams gold is at Rs 44,384 and 1 gram is at Rs 5,548. The cheapest gold to buy currently compared to others is of 1 gram of 18K.

Due to its record high performance last week, gold prices in 22K and 24K are currently up by over 2.3% each in July month so far.

Gold Weekly Outlook:

As per SMC, gold and and silver had another historic week, delivering returns of over 15% and 30%, respectively, in 2024. Gold reached record highs of $2488 on COMEX and ₹74,731 on MCX before correcting due to profit booking and pressure from a stronger dollar index and U.S. Treasury yields.

Initially, the strength in gold was driven by growing optimism over potential interest rate cuts in the U.S., with traders pricing in over a 90% chance of a 25 basis point cut by the Federal Reserve in September. According to the World Gold Council, global physically backed gold exchange-traded funds recorded their second consecutive month of inflows in June, SMC stated.

This sentiment, as per the brokerage, was bolstered by soft consumer price index inflation data and dovish signals from the Fed. Additionally, strong jobless claims data unexpectedly strengthened the dollar. Speculation over a second term for Trump, following a significant boost in his popularity after a failed assassination attempt, also supported the dollar. In India, recent rupee depreciation added to gold's volatility.

While the overall trend, SMC added, "remains firm". The brokerage believes a further correction is expected. The yellow metal is likely to be weigh down by a decent recovery in the US Dollar (USD) and bond yields amid growing speculation that the Republican Party will be victorious in the United States (US) Presidential elections later this year. The US Dollar Index (DXY), which tracks the Greenback's value against six major currencies, bounces back to near 104.30.

SMC's note also added, "A higher US Dollar makes investment in Gold an expensive bet for investors. 10-year US Treasury yields jump to 4.21%. Higher yields on interest-bearing assets increase the opportunity cost of holding an investment in non-yielding assets, such as Gold. Expectations for the Fed to initiate a move toward policy normalization in September rose as policymakers gained slight confidence that inflation has returned on its path to the central bank's target of 2%."

However, SMC also explained that the officials still want to see more soft inflation data to gain greater confidence in lowering interest rates.

That being said, during the trading week from July 22nd to 27th, SMC's note said, gold may drop to levels between ₹72,700 and ₹72,000, with a possibility of reaching ₹71,000 if it sustains below ₹72,000. Similarly, silver could test ₹88,500, and if it falls below that, ₹88,000 is possible. This week, positive U.S. GDP numbers could trigger further corrections. Gold and silver further went up as gold outperformed silver.