Gold prices in India experienced a slight dip on the Multi Commodity Exchange (MCX) on Tuesday, July 23, 2024. Gold futures set to mature on August 5, 2024, were trading at ₹72,621 per 10 grams, reflecting a decline of ₹97 or 0.13% from the previous close of ₹72,718.

In the global market, gold prices increased modestly as the US dollar remained subdued.

Spot gold rose by 0.2% to $2,401.22 per ounce as of 0204 GMT, while US gold futures climbed by 0.4% to $2,403.60, according to Reuters.

A weaker dollar typically makes gold more affordable for holders of other currencies, contributing to the rise in gold prices.

Economic data and market outlook

Investors are monitoring the upcoming US economic data, including the second-quarter gross domestic product (GDP) report on Thursday (July 25) and the personal consumption expenditures (PCE) data for June on Friday (July 26).

These reports are expected to provide insights into the Federal Reserve’s timeline for potential interest rate cuts.

“Gold looks quite comfortable around $2,400 for now, so there is the chance of a minor bounce heading into GDP,” noted Matt Simpson, Senior Analyst at City Index, according to Reuters.

Despite the potential for growth surprises, Simpson believes gold can maintain a position above $2,360 in the current environment.

Last week, gold prices reached an all-time high of $2,483.60, with markets largely anticipating a 25-basis-point US rate cut by September.

Lower interest rates tend to reduce the opportunity cost of holding non-yielding bullion, supporting gold prices.

Political developments and their impact

Political events in the United States are also influencing market sentiment.

US Vice President Kamala Harris is rallying Democratic support for her unexpected presidential run following President Joe Biden’s withdrawal from the race. M

eanwhile, Donald Trump, in his acceptance of the Republican nomination, promised to cut corporate taxes and interest rates, which could potentially widen the US federal budget deficit.

Future projections

According to Rahul Kalantri, VP of Commodities at Mehta Equities, the Federal Reserve is expected to maintain current interest rates during the July policy meetings, but there is a significant probability of a rate cut in September.

“Gold has support at $2,384-$2,367 per ounce and resistance at $2,422-$2,440 per ounce,” Kalantri noted.

In rupee terms, gold has support at ₹72,550-₹72,280 per 10 grams and resistance at ₹73,010-₹73,330 per 10 grams.