Gold rate today: US recession news to Israel-Iran crisis — five reasons to buy yellow metal today

Gold rate today: Following uncertainty in the US economy after the US jobless claim data surged to a three-year high and rising tension in the Israel-Iran war-like situation, the gold price has witnessed strong buying since the early morning session. Gold price today on the Multi Commodity Exchange for the October 2024 expiry opened at ₹70,044 per 10 gm and touched an intraday high of ₹70,511 per 10 gm within a few hours of the opening Bell. However, the MCX gold rate retraced from the intraday high and touched an intraday low of ₹69,720, around ₹75 per 10 gm lower than its previous close.

According to commodity market experts, after the Central Bank of Japan raised interest rates, there was complete uncertainty regarding the global economy, and fear of slowdowns was further renewed when the US jobless claim data touched a three-year high. With the rising tension in the Middle East due to the Israel-Iran warlike situation and the US-China trade war, gold prices found strong demand at lower levels as investors are on the selling side in most of the assets. The US dollar index has touched a five-month low by coming close to the 102.50 mark. They said the MCX gold rate may touch ₹72,000 per 10 gm in the short term, whereas the spot gold price may touch the $2,500 per ounce mark.

Trigger for gold price rush

Speaking on the reasons that are fueling gold prices today, Prithviraj Kothari, National President of the Indian Bullion and Jewellers Association (IBJA), said, "Gold prices are rising today due to the global economic uncertainty caused after the interest rate hike by the Central Bank of Japan. Japanese are the biggest consumer and investors in gold, and their decision to raise interest rates has put other assets under pressure. US dollar, US Treasury yields, global equity markets, etc. are under huge pressure, which has helped gold emerge as an investor's haven."

Prithviraj Kothari of Riddi Siddhi Bullion Ltd said the spot gold price may touch $2,500 per ounce on the upper side, whereas the MCX gold rate may touch ₹72,000 soon.

Echoing Prithviraj Kothari's views, Anuj Gupta, Head of Commodity & Currency at HDFC Securities, said, "Following the Central Bank of Japan's interest rate hike decision, the US Jobless claim data surged to a three-year high, which renewed the economic slowdown fear. This put most of the assets under pressure, and the US dollar index touched a five-month low. The US-30-year bond yield has slipped by nearly 0.50 per cent while the rising tension in the Middle East is further fueling the gold rush."

Both experts advised buying gold in the current rally; however, they advised reviewing one's position at ₹72,000 per 10 gm mark as there is also a liquidity crisis.

Top 5 reasons to buy gold

1] Rate hike by Central Bank of Japan: According to Prithviraj Kothari, Japan's decision to raise interest rates has put doubts into the minds of global investors. There is complete uncertainty regarding the global economy. This has helped gold emerge as an investor's haven, which is fueling the gold price today.

2] US recession fear: "After the higher jobless claim data, fear of US recession has been renewed and hence investors are switching money from other assets to gold and other bullion metals," said Anuj Gupta.

3] Geopolitical tension: "The escalation of tension in Israel-Iran's warlike situation has further worsened the geopolitical set-up. Due to this renewed Middle East crisis, the gold price is finding support at lower levels," said Anuj Gupta.

4] Weakness in US dollar, treasury yields: The HDFC Securities experts believe that after the higher US jobless claim data released last Friday, investors are squaring off their positions in the currency and bond market and taking fresh positions in the gold and silver. This is also why one can expect the gold rush to continue; hence, buying gold at the current market price is advisable.

5] US-China trade war: Anuj Gupta said that geopolitical tension has worsened further after the escalation of the US-China trade war last week. If the tension continues, fodder will be added for the gold price rally.

Anuj Gupta of HDFC Securities said that investors can buy gold today for the short-term targets of ₹71,000 and ₹72,000 per 10 gm, respectively. However, he said that investors must maintain a stop loss at ₹69,000 and maintain buy-on-dips until the gold price is above $2,400 per ounce in the international market.

Gupta said there may be some downside in the gold price today due to the margin calls in the commodity market. But investors should see this dip in gold rates as a good buying opportunity.

Disclaimer: The views and recommendations above are those of individual analysts or broking companies, not Mint. We advise investors to check with certified experts before making any investment decisions.