Gold Prices In US, May 16: 100 Grams Of 24K In USD Surges $150 & 22K Up By $100; Rate Cut Hopes Linger

Gold prices saw a slight surge on Thursday, building on a significant increase from the previous session, as the US Dollar and bond yields weakened amidst growing anticipation of rate cuts by the US Federal Reserve possibly as soon as September.

At 0255 GMT, spot gold edged up by 0.1% to $2,388.10 per ounce, following a more than 1% surge on Wednesday, marking its highest level since April 19. Similarly, US gold futures rose by 0.1% to $2,393.20.

The decline in the dollar by 0.2% against a basket of major currencies played a role in this uptick, making gold, priced in greenbacks, more affordable for holders of other currencies. Additionally, the benchmark 10-year Treasury yield hit its lowest point in over a month.

On the domestic front, tranquility prevailed in the gold market on May 16th, with prices witnessing an upward trend. Both 22-carat and 24-carat gold prices observed a rise of $10 and $15, respectively. Notably, the price of 10 grams of 22-carat gold reached $725, while 24-carat gold ascended to $770. Broader measurements, such as 100 grams of both categories, witnessed a rise of $100 and $150, reaching $7,250 and $7,700, respectively. Prices for 10 grams of 18-carat gold and 100 grams of the same category also climbed by $8 and $80, standing at $593 and $5,930, respectively.

This rise in gold prices aligns with cooling US consumer prices and recent underwhelming economic reports, including a lackluster jobs report and softer-than-expected US payrolls for April. Such developments are viewed positively by Fed policymakers, who are waiting to see renewed progress on inflation before considering reducing borrowing costs.

While gold is traditionally considered an inflation hedge, higher interest rates increase the opportunity cost of holding non-yielding assets like gold. However, comments from Chicago Federal Reserve Bank President Austan Goolsbee expressing optimism about the continued decline in inflation, echoed by Fed Chair Jerome Powell earlier in the week, hinted at a cautious approach towards interest rate adjustments.

In contrast, spot silver experienced a 0.5% decline, reaching $29.56 per ounce, while palladium gained 0.3% to $1,012.93. Platinum, on the other hand, saw a 0.7% rise to $1,071.00, reaching its highest level since May 22 last year.

Gold prices in India surged sharply for the second consecutive day. In India, the price of 22K gold leaped by Rs 700 to reach Rs 67,850 per 10 grams, while 100 grams of 22 carat gold witnessed a substantial surge of Rs 7,000, reaching Rs 6,78,500.

Meanwhile, 24K gold prices rallied by Rs 770 to Rs 74,020 per 10 grams, with 100 grams of 24 carat gold soaring by Rs 7,700 to Rs 7,40,200. Similarly, 18K gold prices saw a rally of Rs 570, reaching Rs 55,510 per 10 grams, while 100 grams of 18 carat gold prices zoomed by Rs 5,700 to Rs 5,55,100 in the country.

Silver prices also experienced a notable rally in India, with 1kg silver prices soaring by Rs 1500 to Rs 89,100, and 100 grams of silver prices zooming by Rs 150 to Rs 8,910. In certain regions of India, silver prices have already surpassed the 90k mark, with rates hitting Rs 92,500 per 1kg in cities like Chennai and Hyderabad.

As global economic indicators continue to fluctuate and central banks navigate the path towards economic recovery, investors remain vigilant, closely monitoring shifts in gold prices and related market dynamics.