Gold Prices In Souk Market; 24K/100 Grams Gold Price Jumps Rs 3,409; Silver Above Rs 91,100; Fed Meet In Focus

Gold prices in the souk market of Dubai witnessed a sharp jump in 22K and 24K prices across grams in terms of Indian rupee. However, gold in Dubai was still cheaper than gold prices in India. Also, MCX gold and silver prices jumped significantly with 1KG of silver futures crossing over the Rs 91,100 mark. The surge in gold and silver prices is due to the trajectory of when the US Fed will finally start to trim key interest rates.

The US Federal Reserve committee is scheduled to meet late hours of June 12 in the Indian time zone. FOMC however is expected to keep rates unchanged at a 23-year high on Wednesday, however, market participants will be eyeing views related to when the Fed looks to cut rates in 2024. FOMC led by chair Jerome Powell has hinted at three rate cuts in late 2024 while stating that inflation is still sticky.

If the Fed keeps the rates unchanged, then it will be a status quo for the seventh consecutive meeting.

A rate cut is positive for gold as non-yielding assets become attractive in overseas markets with the dollar losing its shine. The case is reversed if rates are hiked.

Gold prices in Dubai:

In Indian rupees, the 22K of 100 grams surged by Rs 3,409 to Rs 5,93,149 on Wednesday compared to the previous day. While 10 grams jumped by Rs 341 to Rs 59,315, 8 grams is up by Rs 273 to Rs 47,452 and 1 gram is up by Rs 34 to Rs 5,931.

Coming to 24K gold, the price of 100 grams climbed by Rs 3,409 to Rs 640,305, while 10 grams was up by Rs 341 to Rs 64,031. On the other hand, the price was up by Rs 272 in 8 grams of 24K gold to Rs 51,224, and 1 gram was up by Rs 34 to Rs 6,403.

In dirhams, 22K and 24K gold prices surged by 1.50 dirhams to as high as 150 dirhams.

In 22K, 100 grams is priced at 26,100ams, 10 grams at 2,610 dirhams, 8 grams at 2,088 dirhams, and 1 gram at 261 dirhams.

While under 24K, 100 grams is available at 28,175 dirhams, 10 grams at 2,817.50 dirhams, 8 grams at 2,254 dirhams, and 1 gram at 281.75 dirhams.

On the other hand, prices of 18K soared by 1.25 dirhams to 125 dirhams. 100 grams here is available at 21,650 dirhams, 10 grams at 2,165 dirhams, 8 grams at 1,732 dirhams, and 1 gram at 216.50 dirhams.

Meanwhile, at MCX in India, gold futures soared by 0.29% or Rs 210 in August expiry. The bullion touched as high as Rs 72,172 in the intraday trade.

Also, MCX silver with July expiry skyrocketed by Rs 2,527 to hit Rs 91,190.

Pranav Mer, Vice President, EBG - Commodity & Currency Research, JM Financial Services said, "Commodities are broadly stuck in a range and trading flat, as we look ahead to the U.S. CPI numbers and the Federal Reserve's policy meeting outcome later in the day. Although the Fed is expected to keep rates unchanged today, but their forward guidance/ commentary on inflation will be closely watched and any surprises would lead to increased volatility in the financial market."

He added, "Technically, Gold looks corrective with resistance at 71800/ 72350, while downside support holds at 71050/ 70700."