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Gold Prices Rise Amid Falling Oil Prices
Confirmed
In Short: Gold prices climbed near $4,360 per ounce, buoyed by lower oil prices easing inflation concerns.
Gold prices rose near $4,360 per ounce on Friday, gaining almost 2% from the previous session. The precious metal found support from falling oil prices, which helped ease inflation concerns and pushed bond yields lower.
Oil prices have declined for a third consecutive session as Saudi Arabia works to restore supplies through the East-West pipeline. US Treasury yields have also retreated from multi-year highs, with the 10-year Treasury yield falling to 4.93% after briefly moving above 5% earlier this week.
Markets are now pricing a 92% probability that the Federal Reserve will raise rates, with traders watching oil prices and developments in the Middle East as near-term risks. Christopher Wong, a strategist at Oversea-Chinese Banking Corp, warned that gold prices could move lower towards $4,000 an ounce if key support at $4,250 is broken.
In India, gold prices remained largely unchanged, with 24-karat gold trading at ₹1,53,240 per 10 grams, while 22-karat gold was priced at ₹1,40,800 per 10 grams. Gold prices in India are influenced by international prices, the US dollar exchange rate, and domestic demand, especially ahead of the festive season.
Despite logistical disruptions and a surge in input prices, India's non-oil and non-gold exports registered 15% growth in the April to June quarter. However, tea exports fell 17.5%, and exporters face challenges with rising input costs affecting their margins.
What's confirmed
- Gold is trading near 4,360 USD per ounce on Friday after gaining almost 2% in the previous session.
- The precious metal has found support from falling oil prices, which have helped ease inflation concerns and pushed bond yields lower.
- This remains a risk factor for gold, although lower oil prices and falling Treasury yields are providing temporary support.
- Oil prices have declined for a third consecutive session as Saudi Arabia works to restore supplies through the East-West pipeline.
What's still developing
- Markets are also focusing on Donald Trump’s meeting with Gulf leaders scheduled for next week.
- The Fed has signalled that further tightening may be necessary to bring inflation under control.
- Markets currently estimate the probability of another rate increase as early as October at around 53%.
- On the H4 XAU/USD chart, the market formed a consolidation range around 4,304.
- A downward move towards 4,234 and a subsequent rebound towards 4,381 have now been completed.
- US Market | Dow Jones Highlights: US stocks ended sharply higher on Thursday, led by technology shares, as easing oil prices and lower Treasury yields helped investors look past the Federal Reserve’s rate hike.
- Highlighting the “brisk” growth in India’s non-oil and non-gold exports, which form the core of its exports, Chief Economic Adviser (CEA) V Anantha Nageswaran said exports are benefiting from free trade agreements (FTAs), export diversification and “possibly rising competitiveness”.
- Devendra Kumar Pant, Chief Economist, India Ratings, said that non-oil, non-gold exports have done well in the quarter.