Gold rate today trades flat after weak US retail sales data. US Fed rate cut in

Gold rate today is trading flat despite the US Fed rate cut buzz on disappointing US retail sales data. Gold futures contract on the Multi Commodity Exchange (MCX) for August 2024 expiry opened higher at ₹71,740 per 10 gm but soon came under the sell-off pressure and touched an intraday low of ₹71,645. According to commodity market experts, gold prices today are trading flat as the market has already discounted the disappointing US retail sales data. They said that the market is now awaiting the US Fed’s decision on the rate cuts as US Fed members reiterated the interest rate cut in the upcoming US Fed meeting. However, there was no timeline mentioned for the interest rate cut in Tuesday’s speech.

US Fed rate cut buzz

“Gold prices today are trading flat as the market has already discounted the weak US retail sales. Now, the market is looking at the US Central Bank for a hint on the interest rate cut as disappointing US retail sales data is expected to put pressure on the US Central Bank for a rate cut this year. However, US Fed members showed no signs of any hurry for the US Fed rate cut in their speech on Tuesday, that’s why gold prices are expected to remain range-bound on Wednesday,” said Anuj Gupta, Head of Commodity & Currency at HDFC Securities.

Anuj Gupta said the US dollar retraced from its recent highs after the US retail sales data failed to meet the market expectations. However, the US Fed members continued their inflation concerns, which enabled the US currency to bounce back and put the precious yellow metal under pressure.

Kaynat Chainwala, AVP — of Commodity Research at Kotak Securities, said, “US retail sales data released yesterday showed that retail sales in the US rose by 0.1 percent in May, missing the 0.2 per cent forecast and signalling cooling consumer sentiment. Meanwhile, on Tuesday, a chorus of US Federal Reserve officials emphasized the need for more evidence of cooling inflation before lowering interest rates. Elsewhere, according to a recent survey by the World Gold Council, more central banks plan to increase their gold reserves within a year due to economic and political uncertainty.”

Gold rate today: Important levels to watch

Unveiling the investment strategy for gold investors, Anuj Gupta of HDFC Securities said, “MCX gold rate today is expected to trade in ₹71,000 to ₹72,000 per 10 gm range whereas, in the international market, spot gold price may trade in $2,310 to $2,340 per ounce range. However, I would suggest gold investors avoid taking any short positions as overall gold price sentiment is sideways to positive. A buy-on-dips strategy will be a prudent gold investment strategy in the current market scenario.”

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