Gold Soars Close to $1970 as Dollar Plummets to Over 1-Year Low

Published on Jul 13, 2023 12:58

Gold futures continued to trade strongly, having gained over 1% or $24 in the previous session. The surge came as the US dollar tumbled to its lowest level in over a year due to soft CPI data, which increased expectations that the Federal Reserve may only raise interest rates once more this year.

The weakening dollar and anticipation of a more cautious monetary policy have bolstered the appeal of gold as a safe-haven investment. The US dollar index was recently seen trading at 100.10 down 0.10%. Yesterday, it hit a more than one-year low after data revealed a slowdown in the increase of US consumer prices in June.

Core prices rose by just 0.2% on a monthly basis, the smallest gain since August 2021. On an annual basis, core CPI advanced by 4.8%, the smallest annual increase in over two years.

The stock markets across Asia cheered up after the U.S. inflation rate for June came in lower than expected at 3%, the smallest year-over-year increase in two years.

COMEX benchmark gold futures was seen trading at $ 1967.30 an ounce, up $5.6. The commodity may face resistance near $1970-75 levels. Silver also ascended higher, with the international silver futures seen trading up by sturdy 0.62% at $24.46 per troy ounce.

On domestic front, the government on Wednesday imposed import restrictions on certain gold jewelry and articles, a move which would help cut import of non-essential items. Now an importer would need a permission of license from the government for importing these gold products.

The domestic counterpart was seen trading at Rs 59325 up Rs 137 per 10 grams. The contract should face a resistance near Rs 59400 and Rs 59700 levels today. MCX silver futures jumped to as high as Rs 73950 per kg and its initial resistance can be seen at Rs 74400 levels.