Gold Price Today, 12 July- Gold climbs on lower US dollar, declining Treasury yields; US Labour data eyed

Gold Price Today, 12 July: Gold climbs on lower US dollar, declining Treasury yields; US Labour data eyed

Gold Price Today, Gold Price Outlook, Gold Price Forecast: Gold rate is trading higher on Wednesday, while the silver rate is high by 0.39%. On Multi Commodity Exchange, gold August futures were trading at Rs 58,860 per 10 grams, higher by Rs 87 or 0.15%. Silver September futures were trading higher by Rs 276 at Rs 71,393 per kg on MCX.

Gold prices rose on Wednesday after the dollar and bond yields retreated as investors awaited US inflation data that could offer more cues on the Federal Reserve’s rate-hike policy path, according to Reuters. Spot gold rose 0.4% to $1,940.53 per ounce, its highest since June 20. US gold futures were up 0.5% at $1,946.00.

“Resilient Labour data for June and prospects of elevated core CPI might cement expectations for a quarter point hike in July FOMC meeting. US CPI data will be in major focus for the day. The headline CPI is expected to ease to 3.1% y/y, while the core might remain at 5% y/y, according to Bloomberg forecast. Elevated core inflation might raise the odds of a second 25 bps hike in September, as per the June projections. This might prove to be a short term headwind for gold prices,” Ravindra V. Rao added.

Gold to remain volatile

“Gold prices edged higher on Wednesday, with spot gold at Comex trading up by 0.31% at $1939 per ounce in the morning session. A lower US dollar and declining US Treasury yields helped gold rise to its highest level in three weeks. The US dollar’s drop to its lowest level since mid-June boosted traders’ sentiment. Investors are now looking ahead to US CPI data due later today, with the number expected to show further deceleration in inflation,” said Saumil Gandhi, Senior Analyst (Commodities), HDFC Securities.

“We expect post-US consumer inflation data volatility to expand in precious metals. On the technical front, the Comex gold short-term range shifted to the upward side, from $1910–$1935 to $1924–$1950 per ounce for the day. The upside will extend to the next resistance level at $1975/oz (100 DEMA) if the price crosses resistance at $1950. MCX Gold August future has support at Rs 58,410 per 10 gram and resistance at Rs 59,300 per 10 grams,” Saumil Gandhi added.

Gold to be range bound

“Gold price edged higher amidst a fall in Dollar Index and US bond yields and as investors cautiously awaited US inflation data that could offer more cues on the Federal Reserve’s rate-hike policy path. The dollar index fell 0.2% to its lowest level since May 11; while 10-year US Treasury yields also slipped to their lowest in nearly a week. Fed members said the central bank was close to ending its monetary policy tightening; Fed Bank of New York President John Williams reiterated that the central bank was not done raising its short-term rate target. According to CME Fed-Watch tool, there is a 90% chance of the Fed raising rates by 25bps at their policy meeting on July 25-26,” said Manav Modi, Research Analyst Commodities and Currencies at MOFSL.

“Focus today will be on US CPI data which is expected at 3.1% against the previous data of 4%. Exactly a year back, we witnessed a peak of US CPI at 9.1%, hence today’s data will be very important in terms of further clarity regarding fed’s monetary policy path. Broader trend on COMEX could be in the range of $1920-1960 and on domestic front prices could hover in the range of Rs 58,550-59,250,” Manav Modi added.