Gold Rate In Bangalore: 24K Falls By Rs 1,100, 22-18K Prices Gets Cheaper; What Are The Triggers?

Gold prices in Bangalore today slipped by Rs. 1,100 and Rs. 1,000 for 24K and 22K respectively. The prices of the safe haven has been constantly up since a few months now, showing a positive growth rate of around 1.06% in May, 2024. Due to the recent developments in the Middle East and the news of rate cuts by the Federal Reserve in the second half of 2024 the Gold is trading in green lines.

Gold prices in Bangalore: 24K gold slipped by Rs.1,100 for 100 grams reaching Rs.7,22,700 from Rs.7,23,800 on previous day. 10 grams went down by Rs.110, reaching Rs.72,270 compared to Rs.72,380 yesterday. While 8 grams went down by Rs.88 reaching Rs.57,816 in contrast to RS.57,914 yesterday. Lastly, 1 gram gold went down by Rs.11 reaching 7,227 from Rs.7,238 the previous day.

The 22K gold price in Bangalore slipped by the same rate. 100 grams went down by Rs.1,000 thus reaching Rs.6,62,500 against Rs.6,63,500. Similarly, 10 grams shocked by Rs.100 touching the mark of Rs.66,250 in contrast to Rs.66,350 the previous day. The 8 grams of gold dropped by Rs.80 reaching Rs.53,000 compared to previous day's closing of Rs. 53,080. Lastly, 1 gram of gold declined by Rs.10 to Rs.6,625 against Rs.6,635 the last day.

In the case of 18K, 100 grams crumpled by Rs.900 reaching Rs.5,42,000 compared to Rs.5,42,900 the previous day. Whereas, 10 grams of gold declined by Rs.90 reaching Rs.54,200 in contrast to Rs.54,290 the previous day. 8 grams of gold went short by Rs72 reaching Rs.43,360 against Rs.43,432 the previous day. Lastly, 1 gram of gold decreased by Rs.9 reaching Rs. 5,420 against Rs.5,429 in the previous day closing.

On the latest momentum in gold, Kaynat Chainwala,Senior Manager-Commodity Research, Kotak Securities said, "COMEX Gold prices pared early gains and closed lower on Tuesday, tracking gains in the greenback amid hawkish comments from Fed officials. Fed Reserve Bank of Minneapolis President Neel Kashkari on Tuesday said it was likely the central bank would keep rates where they were "for an extended period of time" and declined to rule out future hikes."

Chainwala added that markets now show a 68% chance of a rate cut in September, according to CME's FedWatch Tool. Elsewhere, China's central bank topped up its gold reserves for an 18th straight month in April, though at a slower pace. In the absence of any major economic events, Fed speeches will be in focus.

Earlier this month, FOMC decided to maintain the target range for the federal funds rate at 5-1/4 to 5-1/2 percent. The main objective of Fed is to achieve maximum employment and inflation at the rate of 2 percent over the longer run.

At that time, FOMC led by chair Jerome Powell, judges that the risks to achieving its employment and inflation goals have moved toward better balance over the past year. The economic outlook is uncertain, and the Committee remains highly attentive to inflation risks.

Nonetheless, Fed has also stayed on its forecast of 3 rate cuts in 2024.

The US inflation rate is currently standing at 3.48% which is higher than the last month of 3.15% and the long term average of 3.28%. Gold has always acted as a hedge against inflation. This time the US labor market saw the lowest growth since last November, at the same time, the unemployment rate increased to 3.9%. This led to an increase in the spot gold rate which is currently trading at $2,319.5 per ounce.

The US Federal Reserve announced that it will lower its monthly holdings of US Treasury securities from $60 billion to $25 billion in a strategic move. Overall, the FOMC decision was seen as good considering that rising inflation is being seen by a number of inflation measures. As of May 2, the total known global gold ETF holdings had decreased to 80.85 MOz, down from last week's level of 81.158 MOz. The high cost of goods is slowing down physical demand.

The demand for gold in Bangalore is expected to see a spike ahead of Akshaya Tritiya and the ongoing geopolitical tensions of the Middle East might also leave a substantial impact on the price of the yellow metal.