Gold prices rebounded strongly on Tuesday morning, following a dip in the US dollar during early trading. After falling sharply on Monday, the April 2025 gold futures contract on the Multi Commodity Exchange (MCX) opened at ₹85,603 per 10 grams, showing an upward gap, and quickly reached an intraday high of ₹85,690. In the global market, spot gold was priced at $2,896, while the COMEX gold price stood at $2,899 per troy ounce.
Market experts noted that the fluctuations in gold prices today are closely tied to movements in the US dollar. A correction in the dollar earlier in the session spurred demand for spot gold. However, analysts suggest that gold prices are likely to remain between $2,888 and $2,930 per ounce today.
Factors Driving the Uptrend
Anuj Gupta, Head of Commodities and Currency at HDFC Securities, explained that the dip in gold prices on Monday came after US Federal Reserve Chairman Jerome Powell delivered a positive outlook on the US economy and took a dovish stance on potential rate cuts. Gupta pointed out that the US dollar’s movement continues to dictate gold price trends, with the dollar index falling during early trading, which helped lift MCX gold rates.
Praveen Singh, Associate VP at Mirae Asset Sharekhan, highlighted additional factors influencing gold prices. Despite a weaker-than-expected US nonfarm payroll report for February, which saw the addition of 151,000 jobs (below the forecast of 160,000), it was not as disappointing as anticipated. Singh noted that the unemployment rate rose from 4% to 4.1% in March, while average hourly earnings increased by 4% year-on-year. He also referenced Powell’s remarks at the Chicago Booth 2025 Monetary Policy Forum, where the Fed Chair reassured that the US economy remains stable, and there is no immediate rush to cut interest rates.
Outlook for Gold Prices
Looking ahead, Singh expects gold prices to trade within a narrow range with a slight downward bias, influenced by a stronger US dollar and Powell’s positive economic outlook. Market participants will closely monitor upcoming US economic data, including the Consumer Price Index (CPI) and Producer Price Index (PPI), which are scheduled for release later this week.
Conclusion
In conclusion, the recent rebound in gold prices is primarily driven by fluctuations in the US dollar and market reactions to the latest economic signals. While the short-term outlook remains uncertain, with experts expecting gold prices to trade within a specific range, the upcoming economic data from the US will likely play a crucial role in shaping the trajectory of gold prices in the coming days. Investors and market participants should stay informed on these developments to make well-informed decisions.
Disclaimer: This article is intended for educational purposes only. The views and recommendations expressed are those of individual analysts or brokerage firms, not Mint. Investors are advised to consult certified experts before making any investment decisions.